Fundamental analysis GBPUSD, EURUSD, NZDUSD, AUDUSD, USDCAD, XAUUSD, Brent, WTI for 03.03.2022
The key event last Wednesday was the Fed chief's speech to Congress. Finally, Jerome Powell said that he would recommend a 25 basis points rate hike at the March meeting. He also said that the Fed is prepared to act aggressively if inflation starts to accelerate faster than it is currently anticipated. The central bank will start to act slowly but is prepared to accelerate, which makes the dollar a very attractive stock for investors given the geopolitical tension.
The EUR/USD is once again preparing to hit a local low. The ECB is in a difficult situation. On the one hand, the record rise in consumer prices in the region to 5.8% in February indicates the need to tighten monetary policy and exit QE. At the same time, such actions would halt economic recovery in the Eurozone against the backdrop of the crisis in Ukraine. Energy prices continue to rise, exacerbating inflation. Excluding Russia, as an economic partner is a severe blow to Europe's economy, the consequences of which still cannot be fully assessed. It is also worth noting that in the short term, significant pressure on the pair could come from the release of strong US labour market statistics tomorrow.
The British pound is moderately lower on Thursday. GBP/USD cannot overcome the resistance at 1.3400. The dollar continues to strengthen in the status of a safe haven currency, in addition, it is worth noting the shortage of dollar liquidity. Today the pressure on the Pound was created by the publication of the macroeconomic statistics on the business activity in Britain. On the whole, the composite PMI and the index of business activity in the manufacturing sector showed positive dynamics in February. At the same time, market participants hoped for a more significant increase in both indexes.
AUD/USD this week stayed in the positive zone thanks to the Reserve Bank's rational policy. The head of the regulator said that inflation is under control. In addition, it is worth noting the trade surplus in January. NZD/USD appreciated yesterday due to a favourable trade agreement between New Zealand and the UK. At the same time, currencies with high beta coefficients are losing their attractiveness, as investors' risk appetite is falling. The USD/CAD is consolidating near strong support at 1.2600. The Canadian dollar strengthened on Wednesday after the Bank of Canada raised its key rate by 0.25% to 0.5%. This was the first increase in 3 years. In doing so, the regulator said further monetary policy tightening is needed to combat rising inflation
The oil market continues to strengthen, boosting inflation in major economies. Brent and WTI traded above $110 a barrel on Thursday. The Ukrainian crisis is adding to supply shortages on a daily basis. Additional support for hydrocarbons is provided by OPEC+ position, as parties to the pact do not increase production and comply with agreements
The XAU/USD is still a safe haven asset despite the strengthening of the dollar. The volume of long positions in the metals market continues to increase, holding on to the progress made earlier. Investizo sees a strengthening of the instrument in the range 1950-1956. However, it is worth bearing in mind that the achievement of local highs has often led to an active sell-off in the metals and a consequent medium-term correction.