Review of the dollar, euro, pound, yen, aussie and gold prices for March 12, 2021


The European currency is declining against the US dollar during today’s Asian session, retreating from local highs since March 4, updated the day before. The reason for the emergence of corrective dynamics was the results of the meeting of the European Central Bank (ECB) on Thursday. As expected, the European regulator did not change interest and deposit rates, however, it clearly signaled that it will increase the total volume of bond purchases from next month in order to correct the yield curve, which has recently served as a significant source of speculation in the market. The focus of investors today is statistics on consumer inflation from Germany for February, as well as January data on the dynamics of industrial production in the eurozone.


The British pound is slightly declining against the US dollar during today’s morning session, having managed to renew local highs since March 4 and touch the 1.4000 mark. The pair is under pressure from strong statistics on the dynamics of claims for unemployment benefits, published in the US the day before. During the week of March 5, the number of initial applications decreased from 754 thousand to 712 thousand, which turned out to be better than the expected 725 thousand. The number of repeated applications fell from 4.337 million to 4.144 million, also ahead of forecasts of 4.22 million. Investors are in no hurry to open new positions on the instrument, preferring to wait for the release of a block of macroeconomic data from the UK on industrial production and GDP dynamics in January.


The Australian dollar is showing a weak downward correction against the US currency in today’s Asian session, retreating from local highs since March 4. The instrument’s position is under pressure from technical factors, as well as rather strong macroeconomic statistics from the US on the dynamics of applications for unemployment benefits. In addition, investors are reacting to Joe Biden’s long-awaited signing of the $ 1.9 trillion US stimulus bill. Recall that during the discussion, the package of economic incentives has undergone a number of changes. In particular, the increase in the minimum wage to $ 15 per hour at the federal level was removed from it. The focus of investors today is statistics from the United States on the dynamics of manufacturing inflation and the consumer confidence index from the University of Michigan.


The US dollar resumed strong gains against the Japanese yen during today’s Asian session, quickly recovering to previous record highs. The instrument adds about 0.27% and is testing the 108.75 level for a breakdown upward. Strong support for the dollar is provided by strong macroeconomic data from the US, which signals a further recovery in the US economy. In addition, the market received a very optimistic signal from the Joe Biden administration, which was able to quickly pass a bill to help the American economy in a record amount of $ 1.9 trillion. In turn, the macroeconomic statistics from Japan again came out worse than their forecasts. Thus, in particular, the index of activity of large enterprises in the manufacturing sector in Japan in the 1st quarter of 2021 fell sharply from 21.6 to 1.6 points, while market forecasts assumed its growth to 25.9 points.


Gold prices are slightly declining during today’s Asian session, building on the corrective momentum that had formed the day before. The pressure on the position of gold is again exerted by the growing yield of US bonds, which reacted to the optimistic statistics on the dynamics of applications for unemployment benefits. In turn, a more confident decline in the instrument is hampered by the long-awaited signing by Joe Biden of a bill to stimulate the American economy in the amount of $ 1.9 trillion. It is expected that such a powerful injection of money into the economy will contribute to a sharp increase in inflationary risks, while gold is one of the main instruments for hedging inflation. However, while the statistics on inflation in the US does not cause significant concerns, and therefore the prospects for the growth of the American currency remain.

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