Dollar Index Gains on ECB Dovishness, Jobs Data Eyed

Dollar Index Gains on ECB Dovishness, Jobs Data Eyed


The dollar index which measures the greenback against a basket of major currencies rose to an eight-week high of 97.71 following dovish ECB meeting. The latest swing higher started last Thursday following better than expected GDP figures and is still in play. Market participants await the release of February's jobs report later today where the focus will be on the earnings as inflationary pressures could allow the Federal Reserve to resume the monetary policy tightening cycle. The USDCHF climbed to a high of 1.0124, the highest since mid-November, and the USDCAD tested a two-month high of 1.3467.


The Euro tumbled against other major currencies following the European Central Bank monetary policy meeting. The bank left interest rates unchanged while changing their forward guidance. Interest rates now are expected to remain at their lowest levels beyond 2019. Moreover, the bank announced new Targeted longer-term refinancing operations (TLTROs). Also, the bank downgraded the growth and inflation forecasts. The EURUSD plunged to a twenty-one-month low of $1.1176, and the EURJPY dropped to a three-week low of 124.27.


Gold prices surged as US treasury yields declined along with US stock indices. The gold ounce bounced from a six-week low of $1280 to trade higher at $1294, the silver ounce hovered near the 200-day simple moving average at $15.12, while palladium dropped slightly to $1520.


Oil prices drifted lower following weak Chinese trade data. The Chinese exports and imports slumped in February which ensures a slowdown in the economic activity. Moreover, the European Central Bank president Mario Draghi declared yesterday that the economy is in a period of continued weakness and pervasive uncertainty. The West Texas Intermediate crude futures fell to a low of $55.98, and Brent futures dropped to a low of $65.33.

Major Economic Events

GMT Country Event Expectation Previous
13:30 US Average Hourly Earnings (YoY) (YoY) (Feb) 3.3% 3.2%
13:30 US Nonfarm Payrolls (Feb) 181 304
13:30 US Unemployment Rate (Feb) 3.9% 4.0%
13:30 CA Employment Change (Feb) 0.3 66.8
13:30 CA Unemployment Rate (Feb) 5.8% 5.8%


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