Dollar Falls After Powell's Testimony; Pound Extends Gains

USD

The Dollar index which measures the greenback against a basket of major currencies dropped to a three-week low of 95.95 on Powell's testimony. He reaffirmed that the Fed would follow a "patient" stance on policy changes. He also stated that the economy is healthy and the outlook is favorable. However, he declared that the recent economic data has softened, but they expect "solid" data in 2019 but slower than in 2018. The US 10-year Treasury yields fell to a low of 2.63%, the USDJPY tumbled to an eleven-day low of 110.35, and the EURUSD rose to a twenty-day high of $1.1403.

GBP

The British pound was the strongest currency across the board on lower chances of "no-deal" Brexit. Theresa May will offer the lawmakers the possibility to vote on delaying Brexit which reduces the chances of leaving without a deal. A meaningful vote will take place on March 12, if she failed to win the approval of the House of Commons, another vote will take place on March 13 on whether the MPs support leaving without a deal. If both votes fail, there will be another vote to extend article 50(postpone the withdrawal date). The GBPUSD climbed to a five-month high of $1.3290, and the GBPJPY rose to a three-month high of 147.06.

Metals

Gold prices remain caught in a tight trading range between a high of $1333 and a low of $1321 awaiting fresh fundamental drivers. On the other hand, the silver ounce rallied during the Asian session to an eight-month high of $16.25, but failed to hold gains and dropped back to $15.85. Meanwhile, palladium retreated from a record high of $1570 to trade near $1550.

Oil

Oil prices recovered slightly from Monday's losses following OPEC's comments. Prices plunged on Monday as President Trump tweeted that the world cannot take high oil prices. Yesterday, OPEC+ stated that they are sticking to current quotas and they could possibly extend the supply cuts. On the other hand, the American Petroleum Institute reported that the weekly US crude oil stock declined 4.2 million barrels last week. The West Texas Intermediate crude futures rose to a high of $56.06, and Brent futures advanced to a high of $65.70. The U.S. Energy Information Administration will report the official inventories data later today.

Major Economic Events

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