March 07, 2022
EUR/USD: EUR/USD has extended its four-week downtrend towards hitting a fresh multi-day low as the trading week begins. That said, the major currency pair dropped to the lowest levels last seen during May 2020 before taking a breather around 1.0860. The bears, however, keep reins amid broad risk-off mood and escalating pressure on the Fed to lift benchmark rates at a faster pace due to increasing inflation. An upbeat US jobs report and hawkish comments from Chicago Fed President and FOMC member Charles Evans act as an additional bearish indicator for the EUR/USD prices. The US jobs report for February showed that the headline Nonfarm Payrolls (NFP) rose by 678K, well above the median forecast of a 400K figure and upwardly revised 484K prior. On the same line, the Unemployment Rate dropped to 3.8% versus 4.0% previous readings and 3.9% expected.
AUD/JPY: AUD/JPY has been supported in the open due to a spike in global commodity prices spurred by Russia’s invasion of Ukraine. The fears of an inflation shock in the world economy as oil soars on the prospects of a ban on Russian crude supplies as lifted the commodity-linked currency, AUD. Meanwhile, AUD/JPY, which usually walks toe to toe with risk sentiment with a high beat to global stocks, is rallying despite the sell-off in US futures and the Nikkie on Monday. The S&P 500 futures are off by over 1.5%, while the Nikkei is losing 2.9% at the time of writing. Additionally, the AUD surplus is a supporting factor and US dollar receipts in commodities sold will be something that traders will continue to weigh up for the forthcoming weeks.
XAU/USD: Despite recently easing from the $2,000 threshold, gold (XAU/USD) prices remain on the front foot around a 19-month high as traders seek risk-safety amid the ongoing Russia-Ukraine jitters. The quote eases to $1,988, up 1.0% on a day, while heading into Monday’s European session. The yellow metal refreshed multi-day high earlier in Asia as risk-off escalated on the weekend news suggesting Russia’s intensified military invasion of Ukraine. On the same line were comments from the West suggesting an oil import ban from Russia. Recently, Bloomberg said that the US also weighs acting without allies on the ban of Russian oil imports. It’s worth noting that Russia’s stand as the world’s third-biggest oil producer adds to the global supply crunch and strengthens commodities additionally. As a result, gold buyers are likely to keep reins, but the pullback moves can’t be ruled out should this week’s US inflation figures favor the faster Fed rate-hikes.