Market Insight 21-02-2024

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  • Market Insight 21-02-2024


Yesterday, the Euro (EUR) strengthened as wage growth in Q4 of 2023 eased in line with expectations. EURUSD reached a two-week high while GBPEUR hit a month low, though these gains may be limited without positive surprises in Thursday’s PMI numbers. Meanwhile, speculation about a rate cut rose slightly following comments from BoE Governor Bailey, and in Canada, higher-than-expected inflation led to increased expectations of rate cuts, weakening the Canadian Dollar (CAD). The US Dollar (USD) also weakened as treasury yields declined, with GBPUSD rebounding to pre-inflation levels before encountering resistance.


BoE’s Dhingra will deliver a speech today.

Market Insight:

Ahead of the FOMC meeting tonight, market direction may be influenced by risk appetite, particularly with Chinese equity markets rallying, leading to USD weakness. Resistance levels were observed in GBPUSD and EURUSD, signalling caution among USD buyers. Similarly, support levels were noted in GBPEUR, indicating less inclination among EUR sellers to push rates lower. Nvidia’s earnings report could also impact market sentiment, especially in the tech sector, potentially weakening the USD further.


USD weakness persisted, with the USD index retracing recent gains. The index found support within its 2024 uptrend channel, with upcoming events such as the FOMC minutes, Thursday’s PMI numbers, and Fed Waller’s speech on Friday likely to influence the USD’s trend. Positive economic data and a hawkish stance from the Fed will be necessary for USD strength to resume.