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USD pops, gold drops before FOMC

My attitude is that I always want to be better prepared than someone I’m competing against. The way I prepare myself is by doing my work each night. - Marty Schwartz

 

 

HEADLINES

 

 

  • Dollar firms as oil prices moderate, taking momentum from euro
  • Japan calls for 'stable' FX moves as weak yen weighs on import-reliant economy
  • Oil plunges over 6% on easing supply concerns, China COVID cases
  • Gold slides on Russia-Ukraine talks, U.S. rate hike bets
  • Dow jumps 600 points, S&P 500 snaps 3-day losing streak as tech stocks bounce
  • USD/JPY points higher towards the 120 level – Scotiabank
  • GBPUSD Near Term: Downside favored

 

 

FOREX

 

 

Dollar firms as oil prices moderate, taking momentum from euro

 

The U.S. dollar index recovered after falling on Tuesday as volatile oil prices impacted the euro and markets grappled with the significance of talks between Russia and Ukraine and indications that COVID lockdowns will crimp economic growth in China.

The dollar index against major currencies was up less than 0.1% in the New York afternoon as markets awaited statements on Wednesday from the U.S. Federal Reserve after a meeting on monetary policy.

 

Japan calls for 'stable' FX moves as weak yen weighs on import-reliant economy

 

Japan will closely watch exchange-rate moves as market stability was "very important," Finance Minister Shunichi Suzuki said on Tuesday in the wake of the yen's decline to a five-year low against the dollar.

While Tokyo policymakers have traditionally favoured a weak yen for the boost it gives to exports, the sliding yen has become a source of worry recently as it further inflates the cost of food, fuel and raw material imports.

 

 

COMMODITIES

 

 

Oil plunges over 6% on easing supply concerns, China COVID cases

 

Oil prices tumbled more than 6% to their lowest in almost three weeks on Tuesday as supply disruption fears eased and surging COVID-19 cases in China spurred demand concerns.

Brent futures plummeted $6.99, or 6.5%, to settle at $99.91 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $6.57, or 6.4%, to settle at $96.44 a barrel. Both contracts settled below $100 per barrel for the first time since late February.

 

Gold slides on Russia-Ukraine talks, U.S. rate hike bets

 

Gold extended its slide on Tuesday as ceasefire talks between Russia and Ukraine reduced demand for safe-haven assets, while bets that the U.S. Federal Reserve may raise interest rates for the first time in three years added to pressure on gold.

Spot gold dipped 1.8% at $1,916.01 per ounce. U.S. gold futures fell 2.2% to $1,917.7.

 

 

STOCKS

 

 

Dow jumps 600 points, S&P 500 snaps 3-day losing streak as tech stocks bounce

 

The S&P 500 rose on Tuesday for its first gain in four days, as oil prices continued to drop further below $100 and a reading of wholesale inflation came in lighter than expected.

The gains came as traders continued to eye the latest with ceasefire negotiations in Ukraine and China Covid lockdowns that could wreak havoc on tech supply chains. Investors were anticipating a big Federal Reserve monetary decision Wednesday, where the central bank is expected to hike rates for the first time since 2018.

 

 

ANALYSIS

 

 

USD/JPY points higher towards the 120 level – Scotiabank

 

“Rising US yields will likely draw more flows to US Treasury product from Japanese investors and support USD gains versus the JPY.”

“Aside from the direct implications of the war in Ukraine, we think that the risk of tenser China/Taiwan relations represents another potential headwind for the JPY in the future.”

 

 

CHART

 

 

GBPUSD Near Term: Downside favored

 

Technical View: Short position below 1.313. Target 1.295. Conversely, break above 1.313, to open 1.317.

Comments: The pair remains under pressure. Further weakness favored.

Source: Trading Central
 

 

CALENDAR

 

 

*Times in GMT

 

Source: FX Street Economic Calendar


SOURCES

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/usd-jpy-points-higher-towards-the-120-level-scotiabank-202203151358
https://www.reuters.com/business/all-eyes-approaching-fed-meet-yen-slips-further-2022-03-15/
https://www.reuters.com/world/asia-pacific/japans-finance-minister-calls-stable-moves-yen-weakens-2022-03-15/
https://www.cnbc.com/2022/03/15/gold-markets-us-treasury-yields-federal-reserve.html
https://www.cnbc.com/2022/03/14/stock-futures-rise-slightly-as-wall-street-awaits-fed-rate-hike-ukraine-developments.html