What you need to know on Wednesday, March 3:
The American dollar lost its shine ahead of Wall Street’s opening, falling against all of its major rivals. Stocks were mixed, but US Treasury yields ticked lower and held within familiar levels, cooling the greenback’s demand. The EUR/USD pair recovered towards the 1.2080 region while GBP/USD settled around 1.3950. The yield on the benchmark 10-year Treasury note settled at 1.41%.
Commodity-linked currencies recovered, despite oil and gold lacked directional strength. Spot closed at $1,735 a troy ounce, while WTI ended the day below $60.00 a barrel. The USD/JPY pair topped at 106.95, retreating modestly ahead of the close.
Central bankers pledged to maintain stimulus, pouring some cold water on the market’s concerns. RBA Governor Philip Lowe reaffirmed the commitment to maintain the three-year yield target at 10 basis point, indicating that the central bank stepped in “to assist with the smooth functioning of the market.” Lowe added that the RBA is ready to act as necessary.
US Federal Reserve officials were on the wires, and Lael Brainard said that the central bank is focused on “ realized progress towards inflation and employment goals,” adding that the Fed will remain “patient” on monetary policy. Later in the day, Mary Daly said that the country needs fiscal support, adding that she doesn’t see fiscal stimulus boosting inflation “in unwelcome ways.”
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