News

Dollar Index Edges Higher post FOMC Minutes

USD

The dollar index which measures the greenback against a basket of major currencies bounced off a two-week low of 96.29 to trade at a high of 96.66, lifted by the FOMC meeting minutes. Market participants expected a more dovish tone from the Fed. However, the minutes improved the chances for a possible interest rate hike this year. The Fed will continue to monitor financial market developments as they noted the increase of downside risks.  The US 10-year Treasury yields rose to 2.67%, the USDJPY traded sideways near 110.70, and the EURUSD dropped to a low of $1.1322.

AUD

The Australian dollar declined against major currencies despite the strong jobs report. The January jobs report showed that the employment change rose 39.1 thousand, the unemployment rate held steady at 5.0%, while the participation rate ticked higher to 65.7%. However, Westpac revised the Australian GDP lower to 2.2% from 2.6% and raised the expectations of a rate cut in August and November. The AUDUSD fell to a one-week low of $0.7087, the EURAUD advanced to a ten-day high of 1.5988, and the GBPAUD climbed to a three-week high of 1.8388.

Metals

Metals prices weakened as the dollar advanced along with Treasury yields. The gold ounce dropped to a low of $1336, the silver ounce tumbled to $15.95, and palladium drifted lower towards $1457.

Oil

Oil prices soared to a fresh 2019 high supported by OPEC-led supply cuts and the US sanctions on Venezuela and Iran. The West Texas Intermediate crude future jumped to a high of $57.55, and Brent futures climbed to a high of $67.36. Market participants await the weekly US crude inventories from the Energy Information Administration later today.

Major Economic Events

GMT Country Event Expectation Previous
8:30 EU German Manufacturing PMI (Feb)  50.0 49.7
9:00 EU Services PMI (Feb) 51.5 51.2
9:00 EU Manufacturing PMI (Feb) 50.3 50.5
9:00 EU Markit Composite PMI (Feb) 51.1 51.0
12:30 EU ECB Publishes Account of Monetary Policy Meeting     
13:30 US Core Durable Goods Orders (MoM) (Dec) 0.2% -0.4%
13:30 US Initial Jobless Claims 220 239
15:00 US Existing Home Sales (Jan) 5.01 4.99
16:00 US Crude Oil Inventories 3.080 3.633

 

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