Last Friday, the Dollar firmed to six-week highs against the Yen, on track for weekly gains against most rivals as investors were waiting for US job data that are likely to reinforce expectations of a Federal Reserve interest rate hike next week. A surprisingly robust private US jobs report from ADP heightened bets the monthly nonfarm payrolls release will give the Fed more reason to raise rates at its March 14-15 meeting. Many analysts said that interest rate effect will be limited because a lot is priced in, in terms of Dollar. Moreover, the Dollar has risen as US Treasury Yields rose as high as 2.62% on Friday as well, its highest since December 2015.
Last week, Gold fell as well below the key level of $1,200 an ounce and was on track for its worst week in four months, pressured by a stronger Dollar ahead of the closely-watched US non-farm payrolls report.
The EUR/USD pair manages to hold onto previous gains, after the Euro staged a solid comeback on ECB’s less dovish policy outcome. Markets believe that the ECB may be on track to plan its exit from the easy policy. Draghi said “We believe that today’s press conference still puts the ECB on track for an upgrade of the risk assessment –and a change to its forward guidance– later in the year.” He also added that the ECB removed a reference to using all available measures to induce growth and inflation “because the sense of urgency is not here”. The immediate focus now remains on the German trade balance and Euro group’s ECOFIN meetings for fresh impetus on the Euro.