March 29, 2022
AUD/USD: The Australian dollar showed a bearish dynamic from annual highs around 0.7540 as market sentiment changed amid geopolitical crisis, China’s Covid-19 outbreak, and higher inflation pushing global central banks to tighten their monetary policies. Risk appetite is still hampered by geopolitical tensions and the Covid-19 outbreak in China, which affected Shanghai, one of the largest cities. The AUD/USD pulled back below the 0.75 level in the mid-European session but recovered towards this level afterward. In the last three days, the Aussie had consolidated in the narrow trading range until Monday’s price action when the pair soared to an annual high.
USD/JPY: USD/JPY pair has finally met resistance at 125.10 amid the Bank of Japan’s unlimited bond-buying program. The BOJ bought the 10-year benchmark Japanese government bonds yesterday and it’s going to keep buying them through Thursday to keep interest rates low. It is worth noting that the greenback has been rallying sharply in March and has added more than 8% this month. The BOJ’s reluctance to raise interest rates amid growing inflation has caused a large gap between the interest rate cycle of the Bank of Japan and other central banks.
Gold: The gold prices lost around 2% as the US stock market showed growth later in the day amid hopes of a breakthrough in peace talks surrounding the Ukraine-Russia crisis. As for the economic calendar for this week, the US jobs market and eurozone inflation data will be important to watch. The US Nonfarm Payrolls due on Friday will probably show that Employment kept growing in March following two strong reports averaging 580K in January and February.