Thursday, February 29, 2024

The ECB decision and the US GDP data will dominate the markets

After Wednesday’s volatility in the release of PMI data for major economies, markets appeared to moderate early on Thursday, pointing to the announcement of the monetary policy of the European Central Bank (ECB). The US economic agenda will publish the first estimate of the growth of gross domestic product (GDP) for the fourth quarter, along with December durable goods orders and weekly initial jobless claims data.

The US dollar (USD) weakened against its rivals in the first half of trading on Wednesday as a risk-on mood weighed on the action. However, later in the American session, encouraging PMI data, which shows that economic activity in the private sector grew at a faster pace than expected in early January, helped the currency limit its losses. In the European morning on Thursday, the DXY Dollar Index fluctuated above 103.00, while the US 10-year Treasury yield remained above 4% and the US stock index futures traded mixed. US real GDP is expected to grow at an annual rate of 2% in the fourth quarter, up from the 4.9% growth recorded in the third quarter.

US dollar quote this week

The following table shows the percentage change of the United States dollar (USD) against the major currencies this week.

USD 0.04% -0.21% 0.61% 0.23% -0.27% 0.09% -0.56%
EUR -0.04% -0.26% 0.55% 0.18% -0.31% 0.04% -0.60%
GBP 0.20% 0.24% 0.79% 0.43% -0.07% 0.28% -0.37%
CAD -0.60% -0.55% -0.80% -0.38% -0.86% -0.51% -1.17%
AUD -0.23% -0.18% -0.45% 0.38% -0.50% -0.14% -0.78%
JPY 0.28% 0.33% 0.13% 0.88% 0.51% 0.38% -0.30%
NZD -0.09% -0.05% -0.31% 0.51% 0.14% -0.36% -0.66%
CHF 0.56% 0.60% 0.34% 1.14% 0.75% 0.28% 0.63%

The heat map shows the percentage change of major currencies against each other. The base currency is selected in the left column, while the quote currency is selected in the top row. For example, if you select the euro in the left column and scroll down the horizontal line to the Japanese yen, the percentage change shown in the box will represent EUR (base)/JPY (quote).

she USD/CAD gained momentum and posted its highest daily close since mid-December on Wednesday, above 1.3500. After the monetary policy meeting in January, the Bank of Canada kept official interest rate at 5%, as expected. In a press conference after the meeting, BoC Governor Tiff Macklem acknowledged that policymakers’ debates focused on how long rates would remain at current levels before lowering them. After Wednesday’s recovery, USD/CAD entered a period of consolidation above 1.3500 on Thursday.

she EUR/USD took advantage of the broad weakness in the USD and closed in positive territory on Wednesday. However, the pair failed to stabilize above 1.0900 and is now moving sideways slightly below this level. The ECB expects to keep rates unchanged. ECB President Christine Lagarde will comment on the outlook for monetary policy at a press conference starting at 13:45 GMT.

The GBP/USD hit its highest level in almost two weeks above 1.2770 during the European session on Wednesday, after UK PMI data beat analysts’ estimates. The pair staged a downward correction later in the American session and strengthened above 1.2700.

“For the past six months, Companies generally expect their price growth to continue to moderate. but that generally remains above the Bank’s inflation target range of 2%-3%,” the Reserve Bank of Australia (RBA) said in its latest quarterly bulletin. AUD/USD did not react to this post and is now moving sideways below 0.6600.

The USD/JPY fell sharply on Wednesday and lost more than 0.5% on the day. The pair recovered moderately in the Asian session on Thursday and topped 147.50.

After rising to $2,040, the price of Gold lost traction and closed in negative territory on Wednesday, as US 10-year Treasury yields rose on strong US PMI data. Early Thursday, XAU/USD remained relatively calm below $2,020.

World Nation News Desk
World Nation News Desk
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