The cocoa market continues to sell off, with London cocoa pulling back aggressively. The nearly 11% drop yesterday has cocoa trading at its lowest level since November, ING's commodity experts Ewa Manthey and Warren Patterson note.
New Zealand Dollar (NZD) is expected to continue to trade in a range vs US Dollar (USD), most likely between 0.5590 and 0.5640. In the longer run, room for NZD to continue to weaken; it remains to be seen if 0.5565 is within reach, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
USD/JPY fell below 149-levels this morning amid sharp pullback in UST yields. Pair was last at 148.98, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Silver (XAG/USD) attracts buyers for the second straight day on Tuesday and moves further away from a nearly four-week low, around the $30.85-$30.80 region touched last Friday.
The Swedish krona continues to markedly outperform its G10 peers, as SEK appears the preferred way to play market optimism on a Ukraine-Russia peace deal and the boost in EU spending.
Australian Dollar (AUD) is expected to trade between 0.6190 and 0.6250 vs US Dollar (USD). In the longer run, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
The US Dollar Index (DXY), which measures the US Dollar (USD) against six major currencies, extends its losses for the second successive session, trading around 106.30 during the European hours on Tuesday.
USD continued to trade lower, owing to the precipitous fall in UST yields and continued moderation in US exceptionalism. DXY was last at 106.27 levels.
Pound Sterling (GBP) could test the major resistance at 1.2730 vs US Dollar (USD); a break of this level is not ruled out, but 1.2770 is unlikely to come into view.
During President Trump's first term in office, we felt the sequencing of tax cuts (late 2017) and then tariffs (March 2018-August 2019) were key reasons for a strengthening dollar. In other words, the US economy had some fiscal support before tariff wars were waged.
European natural gas prices strengthened yesterday, with TTF settling just over 2% higher on the day, ING's commodity experts Ewa Manthey and Warren Patterson note.
Strong momentum indicates there is scope for Euro (EUR) to rally further vs US Dollar (USD); the significant resistance at 1.0530 could be just out of reach.
Oil prices are under pressure with ICE Brent settling more than 1.6% lower yesterday. This follows news that OPEC+ is sticking with plans to gradually increase supply from April by 138k b/d in the month, ING's commodity experts Ewa Manthey and Warren Patterson note.
Euro (EUR) continued to drift higher vs US Dollar (USD) as European leaders were seen coming together to offer Ukraine support, fuelling expectations for a higher defence spending. Pair was last at 1.0495 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
EUR/USD had a decent rally yesterday as investors focused on the explosive rally in European defence stocks. That Europe needs to spend a lot more on defence now is not in doubt. The question is what does it mean for FX?
Here is what you need to know on Tuesday, March 4: Following Monday's volatile action, investors cling to a cautious stance early Tuesday, while assessing the latest developments surrounding the US tariff policy and retaliatory measures against it.
China’s Commerce Ministry announced on Tuesday that it will slap additional tariffs of upto 15% on imports of key farm products, including chicken, pork, soy and beef from the United States (US).
The USD/CAD pair holds steady around the 1.4500 psychological mark during the Asian session on Tuesday and remains close to a one-month top touched the previous day.
A spokesperson of China’s National People's Congress (NPC) commented on the additional 10% tariffs imposed by the United States (US) on Chinese imports on Tuesday.
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