Will the CPI Crash the USD?
The most impactful releases of this week will fill the market with volatility and sharp movements. Be ready to take action!
Forex, stocks, oil, and gold on Feb 28 - March 4
Last week was super intense! Geopolitical turbulence made the Russian ruble the most volatile currency. Gold rose and fell by more than 8000 points each time. Meanwhile, Brent oil surged to an 8-year high above $100 a barrel. So let's get to the bottom of these events and get ready for the next trading days!
Trade ideas for Forex pairs
The conflict between Russia and Ukraine can have significant economic consequences. Russian central bank is trying to limit the advance of USD/RUB, but the pair may retest 90.00 and even get to 100.00 if the situation keeps escalating. The United States and Europe imposed sanctions on various Russian companies, but their economies will also suffer. Given this new environment, traders started questioning the belief that the US central bank would raise the federal funds rate by 50 basis points in March.
Nevertheless, the USD tested the highest levels since 2020 as traders consider it a better refuge from uncertainty than the EUR or the GBP. Therefore, demand for the US currency will stay high, like the safe JPY and the CHF. GBP/USD will remain vulnerable for a decline to 1.3200 and 1.3050 as long as it's trading below 1.3500.
The Reserve Bank of Australia probably won't hike the rate on Tuesday, so AUD/USD may remain capped by 0.7280. On Wednesday, the Bank of Canada may raise interest rates, and USD/CAD may visit 1.2600.
Oil & gold: what's next?
Fears of disruptions in commodities supply pushed oil and gas prices up. The US tried to leave the Russian oil sector out of sanctions for now. OPEC will decide its production levels on Wednesday, and the odds are that it will stick to the current plan without increasing oil supply more than planned. Still, XBR/USD already includes a lot of news, so further advance probably won't be that rapid. The price may subside towards $90 a barrel.
XAU/USD spent most of last week above $1900. It looks like traders will buy gold on the dips to hedge from global risks. As a result, the yellow metal should keep returning to $1950.
Stocks caught by volatility
The American stock market is sensitive to swings in the overall risk sentiment. US500 got hurt by the news and tested levels below 4200. Even though the price turned back up on Thursday and Friday, there's still a risk of a bearish market. To change this view, buyers need to push the index above 4400.
Elsewhere, Chinese Alibaba reported the slowest-ever growth in quarterly revenue since going public in 2014. After the news, traders will have to see whether the stock manages to remain above $100.
Similar
Three Currencies to Watch This Week
We prepared an outlook of major events of this week. Check it and be ready!
The Fed won't miss these releases!
Here you'll find what awaits the market this week, from the CPI release to a possible gold plunge.
Latest news
Inflation Is in Focus Again
Oil prices are rising and Russia banned the export of its petrol. What's happening in the markets?
Fed’s Rate Pause and UK Inflation Slows
Today's main event for the markets is the FOMC Interest Rate Decision, where the US regulator is widely expected to keep the interest rate at the same level of 5.5%.
GBPUSD May Strengthen Resulting the Fed and The BOE Meetings
In today's market insights, we delve into Citibank's oil price predictions, the evolving competition between Huawei and Apple, the Saudi Arabia-Tesla partnership, and the upcoming rate decisions from the world's major central banks.
