Market Drivers – US Session, February 7

Mohamed Abdelhamid 8 February, 2024 5:27 am Commodities, Forex Market, Market Update

Riskier assets were able to gain additional momentum due to the continuing decline in the US dollar. As global rates continued to rise on Wednesday, investors now seem to support the Fed’s rate cut in May due to ongoing geopolitical concerns.

Silver prices fell to fresh two-week lows around $22.20 per ounce, while gold prices finished the afternoon hardly moving above the $2030 threshold per ounce.

US Dollar’s Performance

Amidst slight speculations on US rate policy path, and the overall risk-on pulse, the USD Index confronted the 104.00 support due to more selling pressure on the American currency. Thursday is when the US’s weekly Initial Jobless Claims, Wholesale Inventories, and Fed’s Barkin speech are due.

For the second straight session, the EUR/USD pair experienced bullish trading and returned to the 1.0780 zone amid prevailing risk-on mood and somewhat hawkish remarks from ECB’s Schnabel.

GBP/USD increased its gains from Tuesday above 1.2600, primarily as a result of the US Dollar’s ongoing downward trend. BoE’s Dhingra is scheduled to speak on Thursday.

The USD/JPY pair recovered some composure and moved above the 148.00 barrier, receiving some backing from the late, slight increase in US interest rates. Thursday in Japan is when the Echo Watchers Survey, weekly results for foreign bond investments, and bank lending numbers are due.

There was no break in the selling pressure on copper prices and iron ore, so the Australian dollar was an anomaly in the risk-associated universe and finished the session with slight losses in the low 0.6500s.

Economic Data

The release of the Producer Prices and the Inflation Rate for the month of January is anticipated to get the most attention in China. A portion of Tuesday’s decline was reversed as USD/CNH traded with gains and reclaimed the 7.2000 area.

According to the EIA’s weekly report, unexpected declines in distillate and petrol supplies supported yet another strong showing for WTI prices, which broke through the $74.00 per barrel barrier.

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