Markets remain indecisive in the second half of the week amid a lack of fundamental drivers. Ahead of the weekend, January jobs report from Canada and the University of Michigan’s preliminary February Consumer Confidence Index from the US will be watched closely by investors. Participants will continue to assess remarks from central bank officials.
The US Dollar (USD) struggled to find demand in the first half of the day on Thursday and stayed on the back foot in the early American session. With Wall Street’s main indexes dropping back into the red following a strong opening, however, the USD managed to regain its footing.
Early Friday, the US Dollar Index holds steady above 103.00 and the benchmark 10-year US Treasury bond yield moves up and down in a tight channel slightly above 3.65%. Meanwhile, US stock index futures trade flat on the day.
During the Asian trading hours, the data from China revealed that the Consumer Price Index (CPI) declined by 0.8% on a monthly basis in January. On a yearly basis, the CPI came in at 2.1%, slightly below the market expectation of 2.2%.
EUR/USD climbed higher toward 1.0800 on Thursday but lost its bullish momentum in the late American session and erased a large portion of its daily gains. In the European morning, EUR/USD stays relatively quiet below 1.0750.
Although GBP/USD retreated from the six-day high it touched near 1.2200, it managed to close the third straight day in positive territory on Thursday. The pair seems to have gone into a consolidation phase at around 1.2100. The data published by the UK’s Office for National Statistics revealed on Friday that the UK economy stagnated in the fourth quarter as expected. On a monthly basis, the Gross Domestic Product contracted by 0.5%. On a slightly positive note, Industrial Production expanded by 0.3% in December, compared to the market expectation for a decrease of 0.2%.
USD/CAD stays relatively quiet near the upper-limit of its weekly range at around 1.3450 early Friday. Unemployment Rate in Canada is forecast to tick higher to 5.1% in January from 5% in December with the Net Change in Employment declining to 15K from December’s strong 104K increase.
USD/JPY stays indecisive and continues to trade near 131.50. Several news outlets reported on Thursday that the Japanese government is planning to present the new Bank of Japan Governor nominees. Meanwhile, Bank of Japan (BoJ) Deputy Governor Masayoshi Amamiya said on Friday that he doesn’t see any imminent need to make YCC more flexible. Amamiya reiterated that it’s appropriate to maintain current ultra-loose monetary policy.
Pressured by the decisive rebound witnessed in the US Treasury bond yield, Gold price turned south late Thursday and snapped a three-day winning streak. At the time of press, XAU/USD was trading at its lowest level since early January below $1860.
Bitcoin lost 5% and broke below the three-week-old trading range on Thursday. BTC/USD stays on the back foot and trades below $22,000 early Friday. Ethereum fell over 6% on Thursday and was last seen trading flat on the day slightly above the key $1,500 level.