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The greenback turned around on Thursday despite data supporting a more aggressive Fed decision. The EUR and GBP gained on positive risk sentiment. President Lagarde indicated that inflation in the area is still high and price pressures are still being felt. Positive corporate earnings boosted sentiment on the day. Central bank officials will be speaking including BoC’s Governor Macklem, ECB’s Schnabel, FOMC’s Bullard, and RBA’s Lowe.
USDCAD pared -0.11% as the dollar retreated on Thursday. On Wednesday, the US retail sales data showed that the economy stayed resilient at the start of the year, suggesting a softer recession than initially feared. Data from Canada showed that consumer spending improved in December with wholesale sales rising -0.8% vs -1.8% anticipated and manufacturing sales rising -1.5% against -1.8% expected. Traders focus on the release of high-impact data from the US including building permits, the Philly fed manufacturing index, the producer price index, and weekly initial jobless claims. The pair established an intraday high at 1.3407 while an extended slide may give sellers 1.3300 and 1.3220.
GBPAUD traded -0.02% lower as bears took over from the 1.7500 high following disappointing jobs data from Australia. Employment change in the country tanked to a shocking -11.5K from estimates of 20.0K causing the unemployment rate to rise to 3.7% from 3.5% in January. The UK’s economic docket features BoE’s Huw Pill’s speech later. However, the sterling may benefit from positive risk sentiment today. Further down bears may seek 1.7250 if the 1.7380 5-day’s low fails to hold.
EURUSD rose +0.21% as sentiment got buoyed by healthy corporate results. ECB’s President Christine Lagarde made it clear in a speech on Wednesday that we should expect another 50 basis points in March after raising rates with the same in February. The pair trades around the 1.0700 regions as the focus shifts to ECB commentary lined up for the day. The pair may slide to a 1.0450 low if the 1.0650 low is breached.
European stocks rallied to a one-year high as investors embrace risk amid central bank tightening. FTSE100 rose by +0.12% to make a fresh all-time high at 8010 level after breaching the 8000 psychological level. CAC40 soared by +1.07% after closing above the 7200 level on Wednesday. The next key level is at 7380 level coinciding with the 3 January 2022 high. DAX surged by +1.26% to 15638 and gains are capped by the 15650 level, a break above that high could strengthen bulls toward the 16300 high.
US stock futures remain steady ahead of Central Bank speeches. US500 futures were down -0.06% and the trend remains range bound between the 4200 high and 4100 low. US100 futures dropped by -0.10% as bulls remain challenged by the 12800 resistance and 12200 support. US30 futures were slightly higher by +0.05% and critical levels to watch are 34500 high and 33500 low.
Gold recovered by +0.13% ahead of the FOMC speakers. The yellow metal broke below the 1850 near-term support as US retail sales data were better than expected indicating the resilience of the US economy amidst high-interest rates. The next key support is at the 1800.00 level.
