ForexLive European FX news wrap: Dollar, oil extend gains

Author: Justin Low | Category: News

Forex news from the European trading session - 5 March 2021

Headlines:

Markets:

  • CHF leads, NZD lags on the day
  • European equities lower; E-minis flat
  • US 10-year yields flat at 1.563%
  • Gold down 0.1% to $1,696.30
  • WTI up 2.5% to $65.40
  • Bitcoin down 1.2% to $47,341

EOD 05-03
The market is sticking with the momentum from yesterday's key risk events for the most part, as the dollar and oil extended gains in European morning trade.

Equities kept calmer though, as the bond rout pauses for breath ahead of North American trading and US non-farm payrolls to follow today.

That said, sentiment remains fragile and investors still look cautious and nervous as US futures chopped around but are sticking closer to unchanged levels now.

Oil was a strong performer as buyers continue to ride on the OPEC+ decision yesterday as Saudi Arabia took a gamble that US shale will not be offer as serious a threat to its market share as it has done in the past.

That is seeing oil prices climb another 2.5% today, with WTI trading above $65.

Meanwhile, the dollar outperformed as Powell gave the green light for US real yields to surge higher against the backdrop of other central banks trying to take action to curb the surge higher in yields in their respective bond market.

EUR/USD fell to fresh three-month lows from 1.1955 to 1.1914 while GBP/USD dropped to a three-week low just below 1.3800 before keeping above that for now.

Commodity currencies slumped the most with AUD/USD falling from 0.7720 to 0.7653 while NZD/USD fell from 0.7175 to 0.7120 on the session.

USD/JPY also crept higher with the pair gaining from 108.10 to 108.56, pushing to its highest levels since June last year before seeing gains ease to 107.30 levels.

US non-farm payrolls will offer a welcome distraction to the market but the post-Powell narrative is arguably going to remain the key focus ahead of the weekend.

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