Forex markets saw significant action as all currency pairs responded to economic data and headlines raking the U.S. dollar and Russia-Ukraine tensions. The Australian dollar (AUD) found itself heavily pressured against the U.S. dollar (USD). In the meantime, the British pound (GBP) and euro (EUR) had their own rollercoaster. Crude oil prices were volatile on renewed supply concerns. Precious metals gold and silver mixed.
The AUD/USD pair recently came within a hair of a key support level at 0.6400, making this is a definitive make-or-break level for traders. The Australian dollar AUDUSD, -0.09% lost ground for a third session in a row. This loss compounds the sour market mood all during the week. Analysts told Bloomberg that the ongoing downtrend is indicative of wider market fears about the Australian economy and its trade partners.
At the same time, the GBP/USD pair slumped to three-day lows after breaking below 1.3500 support area. This surge in turn led to a mid-1.3400s retest with almost immediate effects, reaffirming the mixed economic outlook for Britain and ongoing shakeup in the political arena. Such developments are keenly watched by market participants focused on the effects of poor progress in the Brexit negotiations on currency valuations such as pound sterling.
Meanwhile, the EUR/USD pair was under even more downside pressure, plowing through the 1.1300 support and testing lower levels. With jaw dropping force the greenback roared back to life. After a series of favorable economic reports on the U.S. economy released last week, demand for the USD skyrocketed. This appreciation of the greenback has squeezed even harder on all other major currencies.
Fluctuations in crude oil prices followed as worries about future supply returned. The associated West Texas Intermediate (WTI) crude even bounced below the $62.00 level. This timely movement exposes critical and persistent issues with production capacity and geopolitical stability in key oil producing regions. Traders are trying to sift through reports of widespread supply disruptions and the possible effects on global oil markets.
Of all the precious metals, gold prices were the most volatile. With each slight increase or decrease, gold traded near the $3,300 level per troy ounce. Those ups and downs were driven by an easing of trade tensions, which had weighed on investor confidence. Persistent geopolitical unrest weighed on gold prices, leaving investors skittish.
Silver prices contributed to the pullback on Tuesday, following similar tiger tracks of bullish & bearish shifts, as seen within gold. Similar to other precious metals, including gold and platinum, silver’s performance in 2023 was largely driven by broader market dynamics and growing investor sentiment toward safe-haven assets.