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Russia has ramped up the production of Tu-160M White Swan nuclear bombers and the Tu-214R reconnaissance aircraft. Despite the ongoing geopolitical tensions, the safe-haven US dollar index fell this morning.
China’s industrial profits tumbled by 22.9% year-over-year to 887.2 billion yuan in the first two months of the year, exerting pressure on the CNY/USD forex pair.
Thailand’s car sales fell 3.94% year-over-year to 71,551 units in February, after a 5.58% decline in the previous month. The news sent the THB/USD pair lower in forex trading this morning.
Belgium’s business confidence barometer increased to -7.6 in March, from -12.8 in the prior month, lending support to the EUR/USD forex pair.
Malaysia’s producer prices declined 0.8% year-over-year in February, following a 1.3% increase in the prior month, which sent the MYR/USD pair lower in forex trading this morning.
What’s happening: The US dollar recorded gains against the euro and sterling on Friday.
What happened: The US dollar moved higher as traders remained concerned about the monetary policy stance of leading central banks.
Upbeat economic reported released by the US on Friday also lent support to the greenback.
Why it matters: Markets remained concerned about the health of the global banking system, which sent the safe-haven US dollar higher on Friday.
Banking shares recorded losses on Friday, with the US-listed stock of Deutsche Bank falling more than 3% after the bank’s credit default swaps spiked 200 basis points. US Treasury Secretary Janet Yellen said that regulators are prepared to take further action to ensure safety of the bank deposits of customers.
Last week, the US Federal Reserve raised its key rate by 25bps and signalled one more rate hike this year. The European Central Bank also increased its interest rates by 50 basis points in a bid to cool inflation.
The US S&P Global manufacturing PMI rose to 49.1 in March, from 47.3 a month ago. The figure also topped market estimates of 47, improving sentiment for the US economy.
The services PMI also climbed to 53.8 in March, from 50.6 in January, easily exceeding market views of 50.5. The S&P Global composite PMI expanded the most in 10 months, rising to 53.3 in March, from 50.1 in the prior month.
However, better-than-expected private-sector data from the Eurozone failed to provide support to the euro on Friday. The S&P Global composite PMI for Eurozone improved to 54.1 in March, from 52 in February, topping market expectations of 51.9.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained 0.57% to reach 103.12 on Friday.
The EUR/USD forex pair lost 0.66% to 1.0762 on Friday. The GBP/USD pair fell 0.45% to 1.2232, after hitting a seven-week high of 1.2341 on Thursday.
What to watch: Traders await the release of data on the PCE (personal consumption expenditures) price index, due to be released on March 31, as this is expected to impact the US central bank’s next interest hike decision.
Data on the Dallas Fed manufacturing index, scheduled for release today, will also remain in focus. The Federal Reserve Bank of Dallas’ general business activity index for manufacturing in Texas, which fell 5.1 points to -13.5 in February, is expected to improve to -10 in March.
Context: Cryptocurrency prices fell on Friday amid concerns related to the global banking system.
Details: The largest cryptocurrency by market capitalisation climbed as high as $28,300 on Friday, gaining around 16% so far in March. The overall gains remained limited due to ongoing regulatory issues in the industry.
Bitcoin prices fell later during the session with investors focusing on the stability of banks and the US monetary policy.
The cost of insuring Deutsche Bank’s debts climbed to the highest level in four years, fuelling concerns over the strength of the global banking sector. The news related to Deutsche Bank came just few days after UBS announced plans to acquire Credit Suisse for $3.2 billion and a few weeks after collapse of Silicon Valley Bank and Signature Bank.
Bitcoin prices rose 1.5% over the past 24 hours to trade at $27,930 on Monday morning.
Ethereum, the second-largest cryptocurrency, remained below $1,800, up around 1% over the past 24 hours.
What are expectations: Traders will continue monitoring comments from Fed officials around their monetary policy. Markets will also keep an eye on the global banking situation.
Other Markets: European indices closed lower on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 1.26%, 1.66%, 1.74% and 1.37%, respectively.
| Technical Levels | News Sentiment |
| EUR/USD – 1.0759 and 1.0763 | Positive |
| EUR/JPY – 140.64 and 140.73 | Positive |
| Gold – 1977.55 and 1979.30 | Positive |
| WTI Crude Oil – 69.21 and 69.32 | Negative |
| Dow Jones – 32174.56 and 32281.74 | Positive |
| Futures at 0400 (GMT) | ||
| EUR/USD (1.0770, 0.07%) | Dow ($32,574, 0.43%) | Brent ($74.58, -0.1%) |
| GBP/USD (1.2241, 0.07%) | S&P500 ($4,021, 0.49%) | WTI ($69.28, 0.1%) |
| USD/JPY (130.60, -0.08%) | Nasdaq ($12,942, 0.40%) | Gold ($1,977, -0.4%) |
Saudi Arabia’s balance of trade, Turkey’s business confidence and capacity utilization, Eurozone’s loans to households, loans to private sector and money supply M3, Germany’s Ifo business climate index, Ifo current conditions subindex and Ifo expectations subindex, France’s initial jobless claims and unemployed persons, UK’s CBI distributive trades survey’s retail sales balance, Brazil’s FGV consumer confidence, current account, foreign direct investment and Central Bank of Brazil focus market readout, as well as Mexico’s balance of trade.
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