📌 Shift from Yen Strength to Dollar Strength: Changing Market Trend
✅ Market Overview
The market has shifted from early yen strength to dollar strength today.
- Japan’s GDP exceeded expectations, prompting speculation of an additional rate hike by the BOJ, leading to yen buying.
- However, Fed Governor Waller’s statement of “not supporting a rate cut” turned the market in favor of dollar buying.
- The RBA cut rates by 25bps, but since it was a hawkish cut, the Australian dollar remained resilient.
- A highly volatile market with rapid shifts in currency strength and weakness.
📌 Key Forex Market Points for Today
🎯 1. USD/JPY
📈 Direction: Recovered to 152 level
🔎 Movements:
- Dropped to 151.24 in the morning but rebounded to 152.22 following Waller’s statement.
- With rate cut expectations receding, the dollar is likely to maintain a strong stance.
📌 Key Focus: If the NY Fed Manufacturing Index surprises to the upside, further gains may follow.
🎯 2. EUR/USD
📉 Direction: Lacking clear direction
🔎 Movements:
- Concerns over weak economic sentiment in the Eurozone are weighing on the euro.
- With rising dollar demand, the battle around the 1.05 level is expected to continue.
📌 Key Focus: The German ZEW Economic Sentiment Index (February) could set the direction.
🎯 3. AUD/USD
📈 Direction: Holding firm
🔎 Movements:
- The RBA cut rates by 25bps but did not signal further cuts.
- Market perceived this as a “hawkish rate cut,” leading to a firm AUD.
📌 Key Focus: Can the 0.64 level hold as support?
🎯 4. GOLD (XAU/USD)
📉 Direction: Correction phase
🔎 Movements:
- With reduced Fed rate cut expectations, gold is facing selling pressure.
- User has also taken a short position in gold, expecting a correction.
📌 Key Focus: Monitoring for a potential decline towards 1950 USD.
📌 Key Events Today
📅 NY Fed Manufacturing Index (February)
- Market Forecast: -2.0 (Expected to improve from -12.6 previously)
- Range: -10.0 to +3.2, with a wide spread of estimates
- Key Point: A volatile indicator, significant deviation from expectations could drive sharp market moves.
📅 Other Economic Indicators:
- UK Employment Report (January)
- German ZEW Economic Sentiment Index (February)
- Canada CPI (January)
📅 Key Central Bank & Government Speeches:
- Holzmann (Austrian Central Bank Governor)
- Bailey (BoE Governor)
- Daly (San Francisco Fed President)
- Barr (Fed Vice Chair)
📌 Summary
🔹 A volatile market with rapid shifts in currency strength and weakness.
🔹 The dollar remains strong as rate cut expectations fade.
🔹 The Australian dollar is holding firm post-RBA decision.
🔹 Gold faces selling pressure; monitoring for a move toward 1950 USD.
🔹 NY Fed Manufacturing Index will be a key driver for the dollar’s direction today.
📌 Conclusion: Looking to buy the dollar on dips if significant selling occurs. Continuing to monitor the correction phase in gold for further downside opportunities.
