fundamental_images_5The US dollar continued to meander near two-week across its main competitors, as expectations of a dovish Fed statement mounted that left the Asian markets unnerved. The Yen gained on moderate risk-aversion, as USD/JPY headed back towards the 111.00 handle. Among the European currencies, the Euro tracked the recovery in gold prices while the pound attempted a tepid bounce but remained capped below 1.3300 amid Brexit uncertainty.
There are plenty of event risks on the cards from the EUR calendar, with the UK labour market report and Germany’s ZEW survey to headline.
The UK jobs and wages growth data released at 09:30 GMT with mixed results. In fact, the unemployment rate ticked lower to 3.9% during the first month of the year, Average Earnings surprised to the upside advancing 3.4% MoM during the same period and Claimant Count Change rose by 27.0K during February, missing consensus. In the meantime, on the Brexit front, the likeliness of a third meaningful vote on May’s plan this week has been conditioned to improvements in talks between the government and the DUP and noticeable changes to PM May’s original proposal.
The German ZEW business survey will drop in at 10:00 GMT and could have a major bearing on the common-currency, as Eurozone growth concerns persist.
The NA session is expected to be relatively busy also, starting with the US factory orders slated for release at 14:00 GMT. Later in the American afternoon, the US API weekly fuel stocks data will be reported at 20:30 GMT.
Oil prices are reporting moderate gains and reaching yearly highs on OPEC’s extension of supply cuts. OPEC on Monday cancelled its planned meeting in April, extending supply cuts first initiated in January. With the cartel doing its bid to support its prices, traders have little reason to sell oil. Further, with major central banks adopting a dovish stance, there is a growing feeling that demand-side pressures may not see significant deterioration, as previously feared.
Gold traded with a mild positive bias for the third consecutive session and built on the recent goodish up-move, albeit a combination of factors kept a lid on any strong follow-through and kept a lid on any runaway rally. Growing market expectations that the Fed will opt for a more accommodative policy stance this week kept the US Dollar bulls on the defensive and turned out to be one of the key factors benefitting the dollar-denominated commodity. The USD price dynamics and the broader market risk sentiment might continue to play a key role in influencing the commodity’s price action amid absent relevant market moving US economic releases on Tuesday.