Morning Market Review 02 March 2021
Today, during the Asian session, the EUR/USD pair is declining, renewing local lows since February 5, 2021, and preparing to test the psychological level of 1.2000 for a breakdown. Investors again prefer the safer dollar to the risky euro, which is supported by macroeconomic statistics and expectations of additional support for the American economy. Business activity data released yesterday was better than market expectations. Thus, ISM Manufacturing PMI for February rose from 58.7 to 60.8 points, while the forecasts assumed growth only to 58.8 points. Markit Manufacturing PMI rose from 58.5 to 58.6 points, in line with market expectations. Today, EU investors are focused on German retail sales statistics for January. Also during the day, February data on EU consumer inflation will be released.
Today, during the Asian session, the GBP/USD pair is declining, developing a “bearish” signal that formed at the end of the last trading week, when the instrument retreated from its record highs. The pound is falling due to a large-scale strengthening of USD against almost all major currencies, which is clearly associated with the redistribution of forces after the correction in the bond market. Macroeconomic statistics from the United Kingdom released on Monday remained ambiguous; however, it could not have a noticeable impact on the instrument’s dynamics. Thus, UK Markit Manufacturing PMI for February rose from 54.9 to 55.1 points, which was better than the neutral forecasts of analysts. At the same time, the volume of consumer lending in the country for January fell by a significant 2.392 billion pounds after falling by 0.965 billion last month.
Today during the Asian session, the AUD/USD pair is showing ambiguous dynamics, consolidating after yesterday’s correction attempt. Investors are focused on the decision of the Reserve Bank of Australia on the interest rate, as well as the following comments. As expected, the regulator did not change the parameters of monetary policy and kept the rate at 0.1%. At the same time, it became known that last week, the bank temporarily doubled its purchases of long-term bonds to keep the profitability, which has recently had significantly corrected, at the target levels. The accompanying statement noted that the RBA was still striving for the 3-year target for the yield of the securities, taking all necessary measures to stabilize this value. The rate will remain minimal until the target inflation rate of 2–3% is reached. This is not expected to happen until 2024.
Today, during the Asian session, the USD/JPY pair is growing, renewing local highs since the end of last August. The US currency is supported by reduced demand for risk in response to significant fluctuations in the bond market. Also, investors are worried about the ambiguous pace of economic recovery in Europe, which remains significantly affected by the coronavirus pandemic. On Tuesday, the yen is positively influenced by macroeconomic data. Thus, the unemployment rate for January remained at the same level of 2.9%, contrary to forecasts of growth to 3.0%. The ratio of the number of vacancies to applicants for the same period increased from 1.06 to 1.1, which was better than the neutral forecasts of analysts.
Gold prices are declining during the Asian session today, hitting record lows since June 2020. Yesterday, the instrument was growing steadily in response to corrective sentiments on the market for US bond yields but by the close of the trading session, gold returned to the red zone. The instrument is slightly supported by the expectations of the approval of a new support package for the American economy. On Monday, it became known that the bill has received approval in the US House of Representatives and will now be sent to the Senate, where Republicans and Democrats maintain parity in the number of votes.