The US Dollar advanced against the other major currencies, swaying around its monthly peak. Thes confidence is strong over the US economy growth, which supports the USD.
The USD bulls have strong grounds to stand by their bets, and Tuesday’s Manufacturing ISM data proved they are on the right track. The report showed an increase from 48.2 to 49.5 points, while the median estimate was 48.5 points. The construction spendings in the US rose to the highest point since October 2007, suggesting the economy is starting to warm up after cooling down in Q4 2015.
The probability of a rate hike on March 16 has risen as high as 27%, according to the Chicago Mercantile Exchange data. The Fed may well consider economy well-prepared for the next hike.
EUR/USD declined by 0.11% to 1.0856, USD/JPY gained 0.25%, rising to 114.29, GBP/USD climbed over 1.40 level after a dip to the vicinity of 1.39 level, the pair remains quite volatile, as Brexit risks affect the market sentiments. AUD/USD advances for the third consecutive day, climbing to 2 month peak of 0.7233 level. Today’s rally of 0.81% can be attributed to the surprising AUD/GDP report, showing a 3.0% Year over Year growth in Q4, beating the estimate of 2.5%.
Swiss GDP Year over Year report signaled the growth of 0.4%, versus the expected 0.1%, USD/CHF adds 0.20% to 0.9994 level.
The Euro remains under strong pressure, as weak inflation data came out this week, stirring rumors over extension of the Quantitative Easing program, which will be discussed in a meeting on 10 March.
Gold prices decline, as growing risk appetite leads to a selloff of safe havens. XAU/USD dropped to $1.229,16 from $1.231,86 (-0.15%)
Oil prices retreat after a sharp rally on Tuesday to the monthly peak, as Crude Oil inventories in the US rose to 9.9M barrels, according to the American Petroleum Institute. Reserves in Cushing, Oklahoma, remain on the record high level of 65,066 thousands barrels (week of 02/19/16). The official weekly data will be released today.
The Russian Ministry or Energy reported that Oil output dropped by 0.2% to 10.885M barrels, compared to January levels, while Year over Year output level increased by 2.2%. The news failed to boost prices however, as the Energy Information Administration data on the US crude inventories is in focus.
The US stocks rallied on Tuesday with the global ascending trend, DJIA added 2.11%,S&P 500 grew by 2.39%, NASDAQ gained 2.89%, NYSE added 2.21%.
Asian stocks soared due to the weakening Yen and global risk-easing, Nikkei 225 rose by 4.11%, Topix added 3.75%, Hang Seng drew by 3.07%, Chinese CSI 300 gained 4.12%.
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