Following the release of the US NFP employment report, the Cable saw some downward shift throughout the North American session and fell to a new low, towards the 1.3100 level.
A growth in US rates helped the US dollar, notably at the short end of the curve. The bond market’s changes reflected Friday’s data, raising the possibility that the Fed will raise interest rates in 50-basis-point increments in the coming quarters. Furthermore, more Fed members stated openness to greater rate hikes.
With crucial data out of the way, the market’s attention is taken to the latest developments in the Russia-Ukraine war.
On Friday, as Russian soldiers looked to be retreating from northern Ukraine, the Ukrainian military recovered land and crossed Russia’s borders for the first time and struck a gasoline station in one of its most daring acts since the conflict started five weeks ago.
Traders are still confident about a breakthrough in the Russia-Ukraine peace negotiations and a diplomatic solution to the conflict. A small rise higher in the stock markets demonstrated this.
In a relatively quiet week, some major releases are coming from the US as we move into April’s first week. First, we have the ISM Non-Manufacturing PMI and FOMC Minutes on Wednesday. Bailey of the Bank of England will talk on Monday.
Therefore, incoming geopolitical headlines will continue to significantly impact market risk perception. This, together with rising US bond rates, will boost USD demand and offer trading opportunities for the Cable.
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