Forex News for 27 Feb, 2023

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February 27, 2023
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EUR/USD
  • Inflation is on the rise globally. The reasons for this increase are attributed to the disruption of supply chains due to COVID-19 and Russia’s attack on Ukraine which has further exacerbated inflation, particularly in energy and agricultural exports. 
  • Despite efforts by central banks to combat inflation through raising interest rates, it is expected to take a prolonged period of monetary tightening to bring it back down to targeted levels.
  • The return of inflation has prompted changes in investment and trading patterns. Assets that offer explicit inflation protection, such as Treasury Inflation Protected Securities (TIPS) in the US and index-linked gilts in the UK, have become more popular. 
  • Commodity markets have also seen gains, particularly in oil, which tends to outperform in inflationary times.
  • New Zealand’s Q4 retail sales fell by 0.6% after a surprise increase of 0.6% in Q3 2022.
  • PKN CEO Orlen shared that Russia halted its oil supplies to Poland.
  • The People’s Bank of China weakened the onshore yuan to its lowest level against the dollar since December 30.
  • UK and EU leaders are holding talks in London to address trade and political disruptions in Northern Ireland after Brexit.
  • The USD received support due to concerns over higher interest rates and tensions between Russia and Turkey.
  • The EUR/USD pair may see a breakout from a double bottom pattern towards the 1.0575 area of interest, or traders may make another play for the double bottom support near 1.0535.
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