Forex Today: Sentiment Rust Ahead of More Surprising Indexes
The US Dollar began the week continuing its upward trend from the previous week, but demand for the American currency dwindled before the US market opened as a result of a conflicting report on US durable goods orders. US durable goods orders decreased by 4.5% MoM in January, which was worse than expected but slightly better than the core reading. Contrarily, Pending Home Sales increased by 8.1% in the same month, exceeding forecasts.
Officials of the European Central Bank continued to use hawkish language while reiterating a rate increase of 50 basis points in March. Their US Federal Reserve counterparts increased the bets as well, announcing they would take additional action if inflation did not decrease.
Overall, market participants appeared to be a little more at ease, but inflation and growth worries are still having an impact. The EUR/USD pair reclaimed the 1.0600 level because Wall Street gained ground despite disappointing US economic data for the day. The strength of the stock market put pressure on the dollar.
The Northern Ireland protocol will be changed, as agreed by the UK and the EU. British Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen jointly announced a new "Windsor framework" on Monday, a decisive step towards putting uncertainty in Northern Ireland to an end. Although the agreement needs to be approved, it has helped the GBP/USD pair, which is currently trading around 1.2050, stay afloat.
AUD/USD tinkered with the 0.6700 mark before bouncing back to close the day essentially unchanged at 0.7635. Tuesday's early retail sales in Australia are approaching. While the USD/JPY pair ended the day with only slight losses near 136.20, the USD/CAD pair has fallen to 1.3580.
After reaching a new 2023 low of $1,806.52 for a troy ounce, gold is currently trading below $1,820. The price of crude oil decreased a little bit; WTI is now trading at $75.65 per barrel.