Markets seem to have turned cautious early Thursday with investors refraining from taking large positions. Eurostat will release the Harmonized Index of Consumer Price (HICP) data for February and the European Central Bank (ECB) will publish the Policy Meeting Accounts. In the second half of the day, Initial Jobless Claims and fourth-quarter Unit Labor Costs figures will be featured in the US economic docket.
The US Dollar Index declined sharply during the European trading hours on Wednesday amid improving risk mood. In the second half of the day, the USD managed to stay resilient against its major rivals after the ISM Manufacturing PMI survey revealed that the Prices Paid component climbed above 50. The benchmark 10-year US Treasury bond yield climbed above 4% for the first time since early November after this data and provided additional support to the USD. Meanwhile, Wall Street’s main indexes ended up closing the day mixed as investors readjusted their positions on the first trading day of the month. US stock index futures also trade mixed early Thursday, reflecting the indecisive market stance, but the 10-year US T-bond yield holds above 4%.
EUR/USD climbed to a fresh weekly high near 1.0700 on Wednesday but came under renewed bearish pressure in the Asian session on Thursday. Annual HICP in the euro area is forecast to decline to 8.2% in February from 8.6% in January. ECB President Christine Lagarde will be speaking on the policy outlook in an interview with a Spanish TV in the European session.
Eurozone Inflation Preview: Eyes on monthly HICP amid heightened hawkish ECB bets.
GBP/USD failed to capitalize on the broad-based US Dollar weakness on Wednesday and closed the day flat. The pair stays on the back foot early Thursday and trades below 1.2000. Bank of England (BoE) Chief Economist Huw Pill is scheduled to deliver a speech later in the day.
Gold price edged higher and closed the third straight day in positive territory on Wednesday. Rising US Treasury bond yields, however, started to weigh on XAU/USD on Thursday and the pair was last seen trading in negative territory near $1,830.
USD/JPY regained its traction and climbed above 136.50 on Thursday after having struggled to find direction on Wednesday. Bank of Japan (BoJ) monetary policy board member Hajime Takata said earlier in the day that he does not see the need to take additional policy steps now to improve the market function. Meanwhile, the data from Japan revealed that Capital Spending rose by 7.7% in the fourth quarter, surpassing the market expectation of 2.8% by a wide margin.
Bitcoin gained 2% on Wednesday but lost its traction early Thursday. At the time of press, BTC/USD was down more than 1%, trading at around $23,350. Ethereum rose nearly 4% on Wednesday before turning south during the Asian trading hours on Thursday. ETH/USD trades in negative territory near $1,650.