Market Drivers – US Session, February 6

The US dollar’s correction caused the USD Index (DXY) to retreat from its previous annual highs, which were located at 104.60, in the face of similarly low US yields. On February 7, a number of Fed speakers, including Kugler, Collins, Barkin, and Bowman, will be speaking along with the Balance of Trade numbers.

The EUR/USD pair was unable to take advantage of the fresh selling bias in the greenback, trading inside the well-known range and near the 2024 low near 1.0720. The only announcement on Wednesday will be the Industrial Production numbers in Germany.

With a significant increase, GBP/USD was able to break out of the previous two-day deep pullback and retake the region beyond the crucial 200-day SMA. Alongside the release of the Halifax House Price Index, BoE Breeden and Woods are scheduled to talk across the channel.

A strong negative bias in the US dollar and fresh demand for US bonds caused the USD/JPY pair to break below the 144.00 support level and reach two-day lows. Preliminary readings for Japan’s Leading Economic Index and Coincident Index are scheduled for February 7.

Following two straight days of declines, the AUD/USD pair recovered some of its equilibrium and saw notable gains in response to the dollar’s sell-off as traders continued to process the RBA’s hawkish stance.

In Canada, the BoC Summary of Deliberations and the Balance of Trade figures are due on Wednesday. The softer US dollar caused the USD/CAD to partially retrace its recent two-day rise, while BoC’s Macklem stated that more time is needed for monetary policy to relieve persistent pricing pressures.

Following reports that US crude oil output may fall short of forecasts in 2024, WTI prices extended their Monday gains and briefly touched the 55-day SMA at $73.60.

Tuesday saw gains in the prices of both gold and silver due to the weak performance of the US dollar, falling interest rates on international markets, and a mixed picture in the commodities complex.

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