The US Dollar is having a difficult time finding demand early Tuesday as the upbeat market mood stays intact on easing fears over a global banking crisis. February Goods Trade Balance and the Conference Board’s Consumer Confidence Index for March will be featured in the US economic docket. Bank of England (BOE) Governor Andrew Bailey and European Central Bank (ECB) President Christine Lagarde will be delivering speeches later in the day.
Although the tech-heavy Nasdaq Composite closed in negative territory as the Technology and Communication Services indexes declined sharply on Monday, the S&P 500 and the Dow Jones Industrial Average registered gains, reflecting the risk-positive market environment. Early Tuesday, US stock index futures are up between 0.25 and 0.4% and the US Dollar Index stays in the red slightly above 102.50.
In an interview with the German Handelsblatt newspaper, Jose Manuel Campa, Chairman of the European Banking Authority (EBA), said that the risks in the financial system was still very high and added that rising interest rates were continuing to weigh on financial markets. These comments, however, don’t seem to be having a negative impact on the Euro. After having closed in positive territory on Monday, EUR/USD trades above 1.0800 early Tuesday. At 1315 GMT, ECB President Lagarde will speak at the opening ceremony of the Bank for International Settlements Innovation Hub Eurosystem Centre.
GBP/USD preserves its bullish momentum and trades above 1.2300 in the European morning. BOE Governor Bailey will testify before the UK Treasury Select Committee on the collapse of Silicon Valley bank and the rescue of Silicon Valley Bank UK.
The Japanese Yen continued to gather strength during the Asian trading hours and USD/JPY dropped to 130.50 area before staging a rebound toward 131.00. In an interview with MNI, a former Bank of Japan (BoJ) board member, Makoto Sakurai, said that he was not expecting the new governor to make changes to the yield curve control strategy in July. Meanwhile, Governor Haruhiko Kuroda repeated that it was premature to debate an exit from easy monetary policy.
During the Asian trading hours, the data from Australia showed that Retail Sales rose by 0.2% on a monthly basis in February, missing the market expectation of 0.4%. Nevertheless, AUD/USD took advantage of the risk positive mood and was last seen rising more than 0.5% on the day at around 0.6700.
Gold fell sharply amid recovering US Treasury bond yields and erased a large portion of the previous week’s losses. XAU/USD fluctuates in a tight channel above $1,950 early Tuesday.
Bitcoin lost more than 3% on Monday but seems to have gone into a consolidation phase near $27,000 on Tuesday. Similarly, Ethereum fell 3.35% but managed to stabilize above $1,700.