Fed Chair Jerome Powell will testify today at 19:05 MT time. This event is crucial for traders as the tone of the speech may set the risk tone for the markets for the next two weeks.
Forex today: why is the USD falling?
The dollar index is weakening today. There were several reasons for that. Let’s look.
- First of all, the new White House economic adviser Larry Kudlow announced that Mr. Trump will support a strong dollar, however, he also noticed that it will be a tougher policy in regard of China.
- Secondly, the US retail sales’ data was released yesterday. Although the figure was the same as in the previous month, it appeared lower than the forecast. As the retail sales were the last indicator before the Fed’s policy decision next week, a question on the more hawkish mood on future increases is still open.
- As the result of uncertainties about the Fed’s policy, Treasury yields fell.
- The yen is rising against the US dollar for the second day. The pair fell to 105.78 but could climb and now it is trading near 106. According to Fibonacci retracements, the support lies at 105.60.
- Despite a weaker data of the New Zealand GDP growth, the kiwi is rising. The falling US dollar is supporting this rise. The pair is trading around 0.7320.
- USD/CHF is standing still ahead of the announcement of the Swiss interest rate and the monetary policy assessment at 10:30 MT time. No changes in rate are anticipated, however, the Swiss National Bank can give some comments on the future monetary policy.
- Yesterday the euro declined to the support level at 1.2360 but could not break it that led to the slight strengthening of the euro. It is trading a few points above the support. However, no important data will be released today, so there is a chance that EUR/USD will break the support and fall further.
- Bitcoin is falling. The cryptocurrency plunged to $7,666. Now it is a little bit higher trading quite above $7,700. The support lies at $7,150, not so far for bitcoin price’s speed.
- There are no big movements of the other currency pair.
Non-farm payrolls, the most awaited economic report, will be out on March 5 at 15:30 MT time.
Australian GDP rose by 3.1%, exceeding analysts’ forecasts of 2.5%. The Australian dollar climbed after the release, but then joined its peers in falling against the USD.
Great news for oil bulls! OPEC and its allied producers agreed to expand output cuts for the next month.
The USD skyrocketed after Fed Powell’s speech. OPEC and allied producers agreed to extend production cuts for another month. Oil surged.
The European Central Bank publishes its monetary policy statement that includes an announcement of the interest rate on March 11, at 14:45 MT time.