Financial markets stay relatively calm early Monday as investors refrain from taking large positions ahead of this week’s key events. February Retail Sales data will be featured in the European economic docket and January Factory Orders from the US will be looked upon for fresh impetus later. FOMC Chairman Jerome Powell will testify on policy before the Senate Banking Committee on Tuesday and before the House Financial Services Committee on Wednesday.
The positive shift witnessed in risk sentiment late Friday made it difficult for the US Dollar to find demand and the US Dollar Index (DXY) closed the last day of the week in negative territory. In the European morning, the DXY moves sideways at around 104.50 and the benchmark 10-year US Treasury bond yield stays below 4%. US stock index futures trade modestly higher on the day, reflecting a cautious atmosphere.
EUR/USD managed to register small gains last week on the back of Friday’s rebound. The pair fluctuates in a tight range at around 1.0650 early Monday. Although European Central Bank President Christine Lagarde reiterated in her latest public appearance that a 50 basis points in March is highly likely, ECB policymaker Centeno said on Monday that the decision on the size of the next rate increase must be based on data. “Interest rates have risen too fast,” Centeno added and argued that the ECB should not rush to conclusions very fast.
Following last week’s choppy action, GBP/USD seems to have stabilized above 1.2000 early Monday. Investors keep a close eye on Brexit-related headlines.
AUD/USD is having a difficult time making a decisive move in either direction on Monday. In the Asian session on Tuesday, the Reserve Bank of Australia (RBA) will announce its policy decisions. Reuters’ estimate suggests that the RBA is expected to lift its key rate to 3.6% from 3.25%.
USD/JPY declined below 136.00 late Friday and closed the previous week virtually unchanged. The pair moves sideways near 135.50 early Monday.
Gold price capitalized on retreating US Treasury bond yields late last week and ended up snapping a four-week losing streak. XAU/USD holds steady above $1,850 on Monday.
Following Friday’s sharp decline, Bitcoin spent the weekend in a very tight channel. BTC/USD remains quiet on Monday and was last seen trading flat on the day at around $22,400. Ethereum struggled to stage a rebound over the weekend and lost nearly 5% last week. Ethereum moves sideways near $1,550 in the European morning.
