The ECB President is scheduled for another speech today after emphasizing the point that inflation is expected to remain too high for too long and that interest rates remain the key tool being used to tame inflation in her speech on Monday. Minutes from the RBA indicated that the board agreed to put into consideration a rate hike pause at their upcoming meeting in April. Risk appetite assets gained in the European session as the bank crisis eased.
NZDUSD extended its decline by -0.95% from 0.6280, 1 month high. The pair strengthened as the dollar firmed ahead of the highly awaited Fed meeting. The greenback’s rally may be capped by bets of a less aggressive rate hike by the Fed and an improved risk tone that supports the risk-sensitive NZD. Looking ahead, the US existing home sales will be due along with the Global Dairy Trade Index from New Zealand. An extended leg down may give up 0.6150 and 0.6100. A rally to the upside may require bulls to move above 0.6300.
EURJPY rallied by +0.86% as risk appetite returned to the financial market boosting the risk-heavy Euro. The rally may however be fizzled out by downbeat ZEW economic sentiment for March from the EU and Germany. The data from Germany indicated serious pessimism with the sentiment dropping to -46.5 from an estimate of 17.1 and a previous read of 28.1. EU sentiment came in at 10 from expectations of 16.0. A rally above 142.20 4-day high may give buyers 142.50 and 143.00.
AUDCAD tanked -0.55% ahead of the inflation data from Canada later in the New York session. The AUD was under selling pressure after the RBA published its meeting minutes in Asian trade. The minutes showed that the board preferred to reconsider the interest rate hike pause at the April meeting to reassess the economic outlook. The commodity-linked CAD soared on the back of high crude oil prices on the day. The pair left an intraday resistance at 0.9185 and slid towards 0.9100. A breach below may set targets at 0.9050.
European shares extended gains on Tuesday as banking turmoil eased. The UK100 rose +1.30% above the 7500 mark as 7550 may be reclaimed. The CAC40 surged +1.22% as bulls closed in on 7200. DAX soared +1.35% above the 15000 level.
US stock futures as bank relief boost investor confidence. The DJIA futures gained +0.70% as 32500 remains a key resistance to the upside. A move higher may give buyers 33000. S&P 500 futures appreciated by +0.55%, a few ticks away from the 4000 level. Nasdaq100 futures were up +0.24% trimming down a 2-day loss as bulls may eye the 12750 high.
Crude oil prices soared on Tuesday as the Fed meeting nears. The black liquid traded positively ahead of the API weekly crude oil stockpile. UK oil rose +0.80% from $72.80 currently trading in the $ 74.00 area as bulls may face a challenge at $76.00. US oil was up +0.84% above the $68.00 level with key areas on the rally at $70.00 and $72.00.