Here’s what’s happening on Monday, February 19:
Major currency pairs are trading close to where they closed last week as the economic calendar remains light, and US markets are closed for Presidents’ Day. Germany’s Bundesbank will release its Monthly Report during European trading hours.
The US Dollar gained strength early on Friday after data from the Bureau of Labor Statistics showed stronger-than-expected growth in the Producer Price Index (PPI) for January. However, profit-taking and weekend flows limited further gains before the weekend. Despite closing the fifth consecutive week positively, the USD Index is slightly lower early Monday, but still comfortably above 104.00. Additionally, the 10-year US Treasury bond yield rose to its highest weekly close since November, reaching around 4.3%.
The People’s Bank of China (PBOC) kept its one-year Medium-term Lending Facility (MLF) rate unchanged at 2.50%, as anticipated. This decision had little impact on the market. AUD/USD edged higher during European trading hours and is currently near 0.6550, up 0.2% on the day.
After dipping below 1.0750 on Friday, EUR/USD rebounded and erased its losses to close the day flat. Early Monday, the pair continues to edge higher but remains below 1.0800.
GBP/USD closed slightly lower last week but maintained levels above 1.2600. It is now edging up towards 1.2630 in the early European session.
Japanese Finance Minister Shunichi Suzuki mentioned over the weekend that interest rates may rise eventually, affecting the economy through various channels. As a result, USD/JPY started the week under modest bearish pressure, slipping slightly below 150.00.
Gold, after dropping below $2,000 earlier in the week, rebounded and recovered a significant portion of its losses to close near $2,000. XAU/USD is extending its recovery at the start of the new week, currently trading around $2,020.