Thursday brought some mild risk-on trading back on the surface after the release of the Bank of England (BoE) decision, which comes hot on the heels of the Fed’s dovish statement yesterday. The US dollar moved broadly higher as the euro/dollar fell to around 1.1925, below the 200-day SMA, while cable is declining slightly after the dovish Bank of England (BoE) decision to hold interest rates at a record low of 0.1%. Policymakers mentioned that UK GDP is anticipated recover during 2021 to achieve reach pre-coronavirus levels, and inflation was predicted to get back to 2% in the spring.
The dollar index remains above the 50- and 100-day simple moving averages (SMAs), hovering around 91.70. Dollar/yen is edging upwards as the weekly initial jobless claims increased to 770 thousand in the week ending March 13, the highest level in a month. US stocks futures are negative, with the S&P 500 and Dow Jones retreating from all-time highs.
On Wednesday, Federal Reserve Chair Jerome Powell’s messaged that interest rates will not rise at least through 2023 until there’s been a full recovery from coronavirus pandemic. However, US yields continued to jump. A bullish appetite is observed in European equities with the German DAX 30 unlocking a fresh record high around 14,780, even though Germany announced 17,504 new coronavirus cases and 227 deaths today.
Loonie retreats from fresh highs; Turkish lira skyrockets
Aussie/dollar is heading higher above 0.7800, while kiwi/dollar is flirting with the short-term SMAs around 0.7230. Dollar/loonie is rebounding off the 38-month low at 1.2365 after several days of losses, with the Canadian ADP employment change showing a contraction of 100.8k jobs in February.
The Turkish lira is flying after the Central Bank of Turkey hiked its rates to 19% by 200 bps, surprising markets who predicted a rise of 100bps, and pushing borrowing costs to the highest since August 2019. Board members decided to apply monetary tightening, taking into consideration the upside risks to inflation.
Elsewhere, gold is retreating slightly near $1,737/oz, pressured by higher yields, while oil prices are moving marginally up.
Coming up next
Later in the day, the European Medicines Agency will announce its guidance on the AstraZeneca’s vaccine. During tomorrow’s Asian session, the Bank of Japan will release its interest rate decision around 03:00 GMT.