ForexLive European FX news wrap: Dollar set for first weekly drop for the year

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ForexLive European FX news wrap: Dollar set for first weekly drop for the year

Headlines:

• Major currencies stay muted in European trading
• Don't forget about the bond market as we look towards the end of the week
• Germany February Ifo business climate index 85.5 vs 85.5 expected
• Germany Q4 final GDP -0.3% vs -0.3% q/q prelim
• ECB's Lagarde says Q4 2023 wage numbers are encouraging
• ECB's Nagel: It is too early to cut rates even if a move appears tempting to some
• ECB's Schnabel: Monetary policy has had a weaker impact on dampening services demand
• ECB's Holzmann: The main risk to rate cuts is Red Sea tension
• ECB survey shows Eurozone inflation expectations edge up for the year ahead

Markets:

• AUD leads, JPY lags on the day
• European equities higher; S&P 500 futures flat
• US 10-year yields flat at 4.328%
• Gold flat at $2,023.48
• WTI crude down 1.6% to $76.75
• Bitcoin down 1.2% to $51,015

It was a quiet session as major currencies trended more sideways after some back and forth action in the dollar yesterday.

The greenback is marginally lower at the balance today but the ranges for the day are leaving a lot to be desired. The action in bonds and stocks are also largely muted, so that isn't really helping ahead of US trading. After the bustling gains in equities, we'll see if Wall Street can follow that up later in the day.

In terms of data, the German Ifo business survey reaffirmed sluggish sentiment in Europe's largest economy. Meanwhile, the final GDP reading served to confirm a technical recession for Germany in the second half of last year.

Besides that, ECB policymakers kept up with their pushback as they push markets to wait on the next set of wages data in May before perhaps proceeding with the first rate cut in June.

In the commodities space, oil is seen retreating again as price continues to struggle to get past the $78.40-70 mark for the time being. And gold is looking flattish around $2,023 in hanging on to its gains on the week.

                This article was written by Justin Low at www.forexlive.com.

Source: ForexLive European FX news wrap: Dollar set for first weekly drop for the year

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