Key Releases –
United States of America
Last day, the US dollar is strengthening against its main competitors – the euro, the pound, and the yen.
The US currency continues to be supported by the comments of the Fed Chairman Jerome Powell. Yesterday, during a meeting held by The Wall Street Journal, he tried once again to calm the market by stating that the short-term inflationary pressures will not cause the need to raise rates. According to Powell, monetary tightening will be required when full employment is achieved and inflation is stable at 2.0%, but this is probably not going to happen this year. Last day in the Senate debate will begin on a bill on financial assistance to the American economy. Senators are expected to make the necessary amendments to it, after which the bill will be re-approved by the House of Commons and submitted for signature to President Joe Biden by March 14. Data from the US labor market released last day was positive. In February, the number of nonfarm payrolls increased by 379K, significantly exceeding the expected value of 182K. The unemployment rate fell to 6.2% instead of the expected retention of 6.3%.
Last day, the euro is weakening against the US dollar and is strengthening against the pound and the yen.
The euro is supported by positive data on production orders in Germany. In January, the volume of orders increased by 1.4% after declining by 2.2% a month earlier. The growth of the indicator was ensured by an increase in orders from abroad. The volume of orders from the countries of the Eurozone increased by 3.9%, and from other countries – by 4.4%. At the same time, domestic orders fell by 2.6% amid continued quarantine restrictions. Overall, German industry continues to support the economy despite the continuation of the pandemic.
The pound last day is weakening against its main competitors – the dollar, the euro, and the yen.
The pound is under pressure due to the likelihood of a new exacerbation of relations between the EU and the UK. Recently, London unilaterally extended until October 1 the grace period, during which British food and agricultural products are exempted from checks on the border with Northern Ireland. Brussels has accused the British authorities of violating the agreements, according to which the grace period was supposed to expire in March, and now threatens to go to court. UK Commerce Secretary Liz Truss said the country did not violate the Northern Ireland Protocol and the Brexit deal by its actions.
Last day, the Japanese yen is weakening against the US dollar and the euro and is strengthening to the pound.
Investors are focused on last day’s comments by the head of the Bank of Japan, Haruhiko Kuroda. He said the regulator should ensure consistently low long-term interest rates as the coronavirus pandemic makes Japan’s economic outlook highly uncertain despite the spread of vaccines. Kuroda also stressed the importance of keeping bond yields consistently low in the near term.
AUD is weakening last day against its main competitors – GBP, USD, JPY, and EUR.
The AIG Services PMI released last day was positive. In February, the indicator increased from 54.3 to 55.8 points. However, the Australian dollar remained under pressure due to possible disruptions in the supply of AstraZeneca vaccine and a slowdown in vaccination of the population.
Oil quotes continued to rise last day.
Prices are strengthening amid the decision of the OPEC+ countries not to increase oil production in April and wait for a more noticeable recovery in demand. A small exception was made only for Russia and Kazakhstan, which are allowed to increase production by 130K and 12K barrels per day, respectively. At the same time, Saudi Arabia decided to extend the voluntary limitation of production cuts by 1 million barrels per day until April, although investors believed that it would be canceled or reduced.