Market Drivers – US Session: Investors bracing for a busy Wednesday

The US Dollar’s sharp decline continued Tuesday, hitting its lowest point since early December as economic concerns mounted ahead of crucial US labor data. Investors are bracing for a busy Wednesday, March 5th:

Dollar Weakness: The US Dollar Index (DXY) breached the 106.00 support level, plummeting to a three-month low. This drop reflects growing anxiety about the US economic outlook, further exacerbated by declining US Treasury yields.

Key US Data: Wednesday’s focus is on the ADP Employment Change, alongside final S&P Global Services PMI, ISM Services PMI, Factory Orders, the Federal Reserve’s Beige Book, and the EIA’s weekly crude oil inventory report.

EUR/USD Surge: The Euro strengthened, pushing EUR/USD to new yearly highs around 1.0550, driven by the persistent weakness of the US Dollar. Upcoming data includes the Eurozone Unemployment Rate, final HCOB Services PMIs from Germany and the Eurozone, and Eurozone Producer Prices.

GBP/USD Gains: The British Pound continued its upward trend, surpassing 1.2700 and reaching a three-month peak in the 1.2745-1.2750 range. The UK will release its final S&P Global Services PMI, and Bank of England’s Bailey and Pill are scheduled to speak.

USD/JPY Plummets: The Japanese Yen surged, sending USD/JPY to a five-month low, testing the critical 148.00 support area. Attention will be on Japan’s Unemployment Rate, Capital Spending, and Consumer Confidence.

AUD/USD Holds Steady: After the RBA’s policy meeting minutes, the Australian Dollar, after an initial attempt to reach 0.6250, maintained its position above 0.6200, posting modest gains. Upcoming data includes the Ai Group Industry Index, final S&P Global Services PMI, and Q4 GDP Growth Rate.

Oil Prices Fall: WTI crude oil prices dropped to new yearly lows near $67.00, influenced by geopolitical tensions, OPEC+ production plans, and US tariffs.

Gold Rises: Gold prices extended their gains, surpassing $2,900 per troy ounce, fueled by consistent safe-haven demand.