EURUSD prints a three-day advance while stronger sentiment puts pressure on the US Dollar.
As a result of a favorable risk profile in the early hours of Monday, the EURUSD rose to its highest levels in three weeks. In spite of this, the Euro pair rises to 1.0715, printing a three-day winning run at its best levels in three weeks. As investors await Thursday’s monetary policy meeting of the European Central Bank (ECB) and Tuesday’s US Consumer Price Index data (CPI).
US officials worked to reduce the danger that SVB and Signature Bank posed to the financial markets.
The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the US Treasury Department worked together to take collaborative measures to reduce the risks posed by the SVB and Signature Bank over the weekend. Following the incident, the authorities issued a statement promising “complete protection” for all depositors of Silicon Valley Bank and Signature Bank. In response to the activities of US regulators, “American families and American companies can have faith that their bank deposits will be there when they need them,” stated President Joseph Biden.
It should be noted that China’s opposition to US meddling in Taiwan affairs and the US Nonfarm Payrolls’ (NFP) better-than-expected results appear to be testing the risk-on tenor in advance of this week’s major data/events.
The preceding risk aversion drowned yields, thus Friday’s US job numbers failed to excite proponents of the US dollar.
On Friday, the US Nonfarm Payrolls (NFP) increased by more than 205K compared to expectations to 311K in February, up from 504K (revised), while the unemployment rate increased to 3.6% for the same month, up from 3.4% anticipated and before. In addition, while the labor force participation grew in February, the average hourly earnings climbed year over year but decreased on a monthly basis. But the US was unimpressed by the data. purchasers of the dollar as the US Treasury bond yields and the dollar were drowned out by the market’s risk-off sentiment.
It’s interesting to note that the US Dollar appears to be affected by market concerns that the Fed won’t raise interest rates in March as a result of the newest imbalance in the US banking industry brought on by the repercussions from SVB and Signature Bank.
The US Treasury bond rates are recovering from the monthly low after registering the largest daily loss of the year 2023 on Friday, while the S&P 500 Futures have rebounded off a 2.5-month low, up about 1.0% around 3,905 by press time.
US CPI, the ECB, which is looking for clear guidelines, and statistics focusing on consumers all seem crucial to observe.
Moving on, market activity may be sluggish on Monday due to investors’ caution in light of important data and events. Nonetheless, the ECB is most likely to declare a rate increase of 0.50% and participate in the current risk-on environment to drive the EURUSD price. Yet, hawkish Fed bias may be revived by good US consumer-centric statistics and inflation readings, which might put downward pressure on the main currency pair going ahead.
| Daily SMA20 | 1.0634 |
| Daily SMA50 | 1.0722 |
| Daily SMA100 | 1.0534 |
| Daily SMA200 | 1.0326 |
