The Euro was hurt after the European central bank re-assessed its forward guidance on Thursday and confirming that interest rates will remain at current levels for the rest of the year, as a result the shared currency had a 1% drop yesterday, the biggest single-day decline since Nov. 12. Meanwhile the anti-risk JPY picked up a strong bid in Asia, as risk aversion worsened on dismal China trade data.
GBP/USD declined to the month’s low after pessimism surrounding Brexit and USD strength took their toll on Thursday. Latest developments on the Brexit suggest the UK PM is likely pushing the EU leaders to accept her Irish backstop plan. However, the EU has already given time till Friday end to the British policymakers to come up with something new for Irish backstop to regain the region’s confidence.
The growing evidence of a deeper slowdown in the world’s second-largest economy will likely keep European stocks under pressure today. Also, doubts over US-China trade deal are likely to keep risk assets under pressure. There will be no significant releases in Euroland today, whereas the publication of Non-farm Payrolls for the month of February will grab all the attention across the ocean.
Oil prices fell on Friday after the European Central Bank warned economic weakness would continue and as U.S. crude output and exports chase new records, undermining efforts by producer club OPEC to tighten global markets. A slowdown in economic growth would also likely result in stalling fuel demand, putting pressure prices.
A combination of supporting factors provided a strong lift and assisted Gold to finally break out of a three-day-old consolidative trading range, through the recovery seemed lacking any strong bullish conviction ahead of today’s key event risk. A fresh wave of global risk-aversion trade, as depicted by a sea of red across global equity markets, triggered by a sharp fall in Chinese exports data for February, turned out to be one of the key factors underpinning the precious metal’s relative safe-haven demand.