Market Drivers – US Session 27/03/2023

The week has generally started off quietly and optimistically on the financial markets. Due to a lack of any significant economic news during the US session on Monday, the Dollar Index (DXY) seemed unable to gain from higher T-yields.

Key Developments

On Monday, the DXY lost gains and fell under 103.00 despite an increase in US rates (the curve remains inverted). Although the 2-year rate increased back above 4.00%, the yield on US 10-year Treasury bonds increased towards 3.55%. The Japanese Yen was among the worst performers hit by the improvement in market sentiment and higher yields in Europe and the US. USD/JPY rose more than a hundred pips, climbing above 131.50.

Market players will continue to assess the effects of the financial crisis on the economy after a tranquil start to the week. Prior to Wednesday’s CPI and next week’s RBA meeting, important economic reports, including Australian Retail Sales, are due during Asian time.

Following the most recent banking news, which caused a rise in bank equities, markets displayed a certain amount of relief on Monday. The Nasdaq fell by 0.46% while the Dow Jones rose 194 points, or 0.60%. The VIX continued to trend lower, and Crude Oil jumped by more than 5%. Deutsche shares rebounded and First Citizens Bancshares agreed to buy parts of Silicon Valley Bank (SVB).

With a bullish tendency, EUR/USD is gaining slowly towards 1.0800. Nonetheless, additional consolidation is expected ahead of important inflation data from the US and Europe on Thursday and Friday, respectively (Preliminary March Consumer Price Index) (February Core Personal Consumption Expenditure).

GBP/USD increased somewhat as a result of a falling US dollar, moving closer to 1.2300. From close to 0.9200 to 0.9155, USD/CHF decreased.


AUD/USD is oscillating in a narrow range close to 0.6650. Australia will release its retail sales data on Tuesday. NZD/USD oscillated under 0.6200, with the Kiwi underperforming.

Among the commodity currencies, the Canadian Dollar was the best. The USD/CAD currency pair shed more than 50 pip and closed at its lowest level in three weeks while maintaining above the crucial 1.3645/50 support region. On Tuesday, the Federal Budget will be made public.

The currencies of emerging markets varied. On Monday, the Chilean and Colombian pesos performed better. On the other hand, the South African Rand dropped 0.85% against the US Dollar overall. Gold fell more than $20 and settled around $1,950/oz. Bitcoin dropped 3%, stabilizing at $27,000.

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