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US stocks came under intense selling pressure, although Wall Street trimmed most of its intraday losses ahead of the close. US government bond yields, on the other hand, advanced, with the 10-year note now offering 3.83% and the 2-year note paying 4.61%.
AUD/USD battles to regain the 0.6900 threshold after falling to a fresh monthly low on the back of soft Australian employment data and the sour tone of equities. USD/JPY topped 134.45 with US yields intraday peaks, now down to 133.80.
Gold prices fell to $1,827.58 pr ounce, its lowest since early January. It currently hovers at around $1,842, helped by receding risk aversion. Crude oil prices remained stable, with WTI changing hands at $78.45 a barrel.
Economic Data
There were 194,000 initial jobless claims in the week ending February 11, the weekly data published by the US Department of Labor (DOL) showed on Thursday. This print followed the previous week’s print of 195,000 and came in slightly better than the market expectation of 200,000.
The dollar reached fresh weekly peaks against most major rivals, giving back some ground ahead of the Wall Street close as US indexes bounced from their early lows. The catalyst came from the US Producer Price Index (PPI), up 6% YoY in January, down from 6.5% in December, but above the 5.4% forecast.
The figures revived speculation the US Federal Reserve will maintain the pace of tightening for more than anticipated while a pivot in monetary policy moved further away.
According to the Federal Reserve Bank of Atlanta’s GDPNow model, the US economy is expected to grow at an annualized rate of 2.5% in the first quarter, up from 2.4% in the previous estimate.
Key Developments
The EUR/USD pair trades a handful of pips below 1.0700, while GBP/USD hovers around 1.2010. European Central Bank Executive Board member Fabio Panetta said raising borrowing costs in small increments would allow a better monetary policy adjustment as previous tightening has started to put a brake on economic activity.
BoC’s Tiff Macklem said he expects CPI inflation to fall to around 3% in the middle of this year and reach the 2% target in 2024. However, he added, “if evidence begins to accumulate to show that inflation is not declining in line with forecast, we are prepared to raise policy rate further.” USD/CAD trades at around 1.3420.
Also Read:
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How Can Traders Interpret Remarks By ECB’s Fabio Panetta?
US stocks decline as price, jobs data fuel rate hike concerns
Gold rallies after brief reaction to stronger PPI reading
USD/JPY hits weekly high of 134.46
