As the outlook for the euro zone economy darkened and the conflict between Russia and Ukraine could compromise in the direction of European interests, EUR/USD has remained weak in the recent period. After overcoming the resistance of 107 and 107.30 in a row, the dollar index also did not make a clear break. The trend of the overall currency pair showed a zigzag, and the band market appeared more in commodities and stock indexes.
Fabio Panetta, a member of the European Central Bank’s Governing Council, said the downturn in the eurozone economy was lasting longer than expected, warning that the hitherto resilient job market could be collapsing.
Italy’s central bank governor said economic weakness was “more persistent than we expected” and that a long-awaited consumer-led recovery had failed to materialise.
“The euro area economy has not grown for two consecutive quarters, there are also tensions in manufacturing and there are signs of weakness in the employment situation,” he said at an event in Rome on Wednesday.
The European Central Bank has been cutting interest rates as inflation falls back and economic growth slows. Some officials support continuing to cut interest rates to ensure that consumer price growth does not fall below the 2 percent target. Others, however, said monetary policy should not be a substitute for sound economic strategies in the region.
Bank of America said the BOJ rate hike should help reduce the cost of currency protection for Japanese investors, thereby stimulating their appetite for U.S. investment-grade corporate bonds.
On the back of rising inflation expectations, the Bank of Japan last month raised its key policy rate to its highest level since 2008, raising expectations of further hikes and a flattening of the yield curve for Japanese government bonds.
Bank of America strategist Yuri Seliger and others wrote in a note Tuesday that this should reduce the cost of foreign exchange hedging and raise the relative value of U.S. high-grade bonds, thereby stimulating Japanese demand for these bonds.
“The cost of hedging is primarily the difference between U.S. and Japanese policy rates,” the strategists wrote. “So further rate hikes by the boj will further reduce hedging costs.”
The US dollar gained prominence in global trade in January, accounting for just over half of all international foreign exchange flows sent by Swift, the financial messaging service.
The Society for Worldwide Interbank Financial Telecommunication (Swift) said in a press release that the share of global payments involving the U.S. dollar rose to 50.2 percent in January from 49.1 percent the previous month. This is since mid-2023 this Belgium-based alliance repair
Technical analysis:
Gold: Gold prices hit the green area of our plugin alert yesterday. After the price fell to 2918.50, it rebounded strongly and is now above 2940, harvesting nearly 2.5 times the profit and loss ratio. Intra-day watch for the price to once again hit the record high performance, if there are signs of momentum breaking out, you should try at least one buy stop operation. Please consult the plugin for details.
(Gold 15min chart)
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Nasdaq: Although the blue momentum breakout area did not reach 22320 overnight, the conditions for momentum trading were not triggered; But then the price fell into the yellow liquidity-clearing zone and there was a strong rebound. Within the day, we continue to execute the idea of shock, and low buy or low buy after sweeping liquidity is still within the range of choice. Please consult the plugin for details.
(15min chart)
To experience the same plug-in in the picture, please contact V: Hana-fgfg
Crude oil: Yesterday’s buy stop operation in the blue zone worked well and was able to achieve more than 2 times the profit to storage ratio. The intraday price again retreated to the area around 71.70 to find support. But be sure to wait for new demand areas to appear today before placing an order to buy limit. Please consult the plugin for details.
(15min diagram of crude oil)
To experience the same plug-in in the picture, please contact V: Hana-fgfg
Today’s key financial data and events:
19:00 UK February CBI industrial orders expected difference
21:30 US weekly Quarterly jobless claims (thousands)
23:00 Preliminary euro area consumer confidence for February
