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The US dollar index lost its momentum after weak US economic data. US ISM manufacturing PMI declined to 47.8 In Feb compared to a forecast of 49.50. On Thursday, Fed Reserve Governor Christopher Waller said that he will support rate cuts but needs more supportive data that inflation is cooling. "Last week's high reading on CPI inflation may just be a bump in the road, but it also may be a warning that the considerable progress on inflation over the past year may be stalling," Waller said in prepared remarks.
US headline rose 0.30% m/m in Jan, in line with the estimate. Core PCE came at 0.40%, matched forecasts. It hit a low of 103.839 at the time of writing and is currently trading around 103.846.
According to the CME Fed watch tool, the probability of a no-rate cut in Mar decreased to 95% from 97% a week ago.
After dismal US ISM data, the US 10-year yields declined more than 3%. The US 10 and 2-year spread narrowed to -35.8% from -53%.
Major resistance- 104.25/105
Major support- 103/102.
Economic data for the day
Mar 5th, 2024, US ISM services PMI (3 pm GMT)
Mar 6th, 2024, ADP employment change (1:15 pm GMT)
BOC monetary policy (2:45 pm GMT)
Mar 7th, 2024, ECB monetary policy (1:15 pm GMT)
Fed Powell testifies (3:00 pm GMT)
Mar 8th, 2024, US Non-farm payroll (1:30 pm GMT)
EURUSD-
EURUSD trades in a narrow range between 1.0880 and 1.07950 for the past two days. Every year, HICP inflation declined to 2.7% from 3.1%.
Economic data
Mar 4th, 2024, Sentix Investor Confidence (9:30 am GMT)
Major resistance-1.0880,1.0935
Major support- 1.0760,1.0700
Yen-
The pair showed a minor jump despite the weak US dollar. The policy divergence between the US Fed and BOJ supports the pair at lower levels. Any break above 151 confirms minor bullishness.
Major Resistance- 151,152
Major support- 148,146.50
Canadian Dollar
The pair lost momentum on strong Crude oil prices. Markets eye Bank of Canada monetary policy and employment data for further movement.
Resistance- 1.3600,1.3660
Major support- 1.3500,1.3435
