EUR/USD, GBP/USD, NZD/USD, USD/JPY – U.S. Dollar Declines As Financial Sector Woes Rattle Markets

Key Insights

• Non Farm Payrolls exceeded expectations but Unemployment Rate increased.
• Expectations for Fed meeting shifted to a 25 bps rate hike
• Commodity-related currencies gained ground amid a broad rebound in commodity markets. 

U.S. Dollar

U.S. Dollar Index declined towards the 104 level as traders reacted to jobs reports and problems in the U.S. financial sector.

Non Farm Payrolls exceeded analyst expectations, but Unemployment Rate increased from 3.4% in January to 3.6% in February. The yield of 10-year Treasuries declined towards the 3.70% level as traders rushed to buy safe-haven U.S. government bonds.

The expectations for the next Fed meeting shifted from a 50 bps rate hike to a 25 bps rate hike, which was bearish for the U.S. dollar.

EUR/USD

EUR/USD gained strong upside momentum and settled above the 50 EMA. Currently, EUR/USD is trying to settle above the 1.0700 level. In case this attempt is successful, EUR/USD will move towards the next material resistance level, which is located at 1.0750.

GBP/USD

GBP/USD rallied above the 1.2100 level as traders focused on the strong pullback in Treasury yields. The better-than-expected GDP report from the UK, which indicated that GDP increased by 0.3% month-over-month in January, provided additional support to the British pound.

NZD/USD

NZD/USD moved above the 0.6150 level amid a broad rebound in commodity markets. Other commodity-related currencies have also managed to gain upside momentum in today’s trading session. AUD/USD settled near 0.6625, while USD/CAD tested the 1.3760 level.

USD/JPY

USD/JPY settled below the 134.50 level after BoJ left the interest rate unchanged at -0.1%. BoJ’s ultra-dovish policy remains intact, but the recent changes in Fed policy outlook served as a bearish catalyst for USD/JPY.

For a look at all of today’s economic events, check out our economic calendar.