Forex Today: Markets cautious amid virus concerns, Powell and Yellen eyed

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Here is what you need to know on Tuesday, March 23:

The market mood is cautious on Tuesday as tensions mount ahead of the Fed’s Powell testimony with new infrastructure plans as the backdrop. Concerns about the virus in Europe and fresh volatility in cryptocurrencies are on the agenda.

Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen will testify before Congress on the government’s response to the pandemic. Powell will likely reject inflation concerns and support ongoing accommodation. His prepared remarks echo the messages in the recent rate decision. US ten-year yields have eased to below 1.70% as tension mounts ahead of the event. Apart from Powell, additional FOMC members will be speaking later in the day. 

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Infrastructure: The White House is reportedly considering a $3 trillion infrastructure plan, coming on top of the $1.9 trillion covid relief project which is under deployment. The plan will be presented to President Joe Biden this week and may be split into two parts, with the second one potentially including tax hikes to fund the spending.

Germany will undergo a strict five-day lockdown around Easter and extend its broader measures through April 18 in order to curb the recent surge in cases. Worries about the resurgence of the virus are growing across the old continent. 

Vaccines: One day after AstraZeneca reported promising results, the National Institute of Allergy and Infectious Diseases announced that some of the data is outdated, casting fresh doubts on the embattled immunization solution. On the other hand, the British government is working to ease tensions with the EU about the exports of Astra’a doses amid threats of an export ban. 

GBP/USD is trading around 1.3850 after the UK released mixed labor figures. The Unemployment Rate surprised with a drop to 5% in January while jobless claims leaped by 86,500 in February. Andrew Bailey, Governor of the Bank of England, will speak later in the day.

NZD/USD is changing hands below 0.71, hit by New Zealand’s decision to curb the increase in house prices. AUD/USD has slipped below 0.77 as the land down under is suffering floods. 

The Turkish lira remains under pressure as markets are still worried by the weekend sacking of the central bank governor. USD/TRYis changing hands above 7.77. President Erdogan has said the bank will not take any extraordinary action. 

Bitcoin tumbled to around $54,000 and is consolidating its losses on lower ground. Ethereum is also pressured below $1,700 while Ripple’s XRP leaped above $0.50 after the US SEC allowed exchanges to enable trading of the token on their platforms. 

 

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