The greenback was supported by Powell’s latest comments
Wall Street ended lower on Thursday amid the ongoing Ukraine crisis, with technology stocks leading the losses. Tesla and Amazon sank 4.6% and 2.7%, respectively. Meanwhile, Fed’s Powell reaffirmed that the central bank is set to start a series of interest-rate hikes. As such, the Dow Jones and the S&P 500 fell 0.29% and 0.53%, respectively, while the tech-heavy Nasdaq Composite lost 1.56%.
Following suit, Asian equity markets dipped on Friday, with MSCI’s broadest index of Asia-Pacific shares ex-Japan tumbling 1.5% to the lowest level in nearly 1.5 years. Investors were spooked by reports that Russia began shelling the Zaporizhzhia power plant in Ukraine. While geopolitical tensions stay in the market focus, investors are also awaiting Friday’s jobs report, which is forecast to show the US economy added 415,000 jobs in February.
In currencies, the safe-haven dollar extended the ascent to exceed the 98.00 figure for the first time since May 2020. The USD index jumped due to the renewed safe-haven flows after reports showed a fire broke out in a building at a Ukrainian nuclear complex. Also, the greenback was supported by Powell’s latest comments as the Fed governor said that they could consider the option of a 50 basis points rate hike if they fail to control inflation following the first series of rate increases.
Against this backdrop, EURUSD plunged to the 1.1000 figure that has been capping further losses so far. Should this support zone give up anytime soon, the common currency will target the 1.0940 region. The selling pressure surrounding the euro could intensify if the upcoming US jobs report surprises to the upside, adding to the Fed rate hike expectations. On the upside, the immediate resistance now arrives at 1.1030, followed by the 1.1065 region.