Forex Today: PMI data could wake markets up ahead of key risk events

Here is what you need to know on Tuesday, March 5:

Major currency pairs continue to fluctuate in familiar ranges early Tuesday following Monday's indecisive action. ISM Services PMI survey for February and Factory orders data for January will be featured in the US economic docket in the American session. S&P will also release final revisions to February PMI for the EU, Germany, the UK and the US.

Federal Reserve Chairman Jerome Powell will present the semi-annual Monetary Policy Report on Wednesday and Thursday, the European Central Bank will announce policy decisions on Thursday and the US Bureau of Labor Statistics will release the February jobs report on Friday.

The US Dollar (USD) struggled to gather strength against its rivals in the first half of the day on Monday. The bearish opening seen in Wall Street, however, helped the currency hold its ground and the USD Index (DXY) closed the day virtually unchanged. In the European morning on Tuesday, DXY trades marginally higher but stays below 104.00. In the meantime, US stock index futures are down between 0.3% and 0.5%, pointing to a cautious market mood, while the benchmark 10-year US Treasury bond yield stays quiet at around 4.2%.

Despite the choppy action seen in foreign exchange markets, Gold gathered bullish momentum and extended its rally to a fresh 2024-high above $2,100 on Monday, rising more than 1.5% on a daily basis. XAU/USD consolidates its gains above $2,110 in the early European session.

Gold price flirts with multi-month peak, bulls await more cues on Fed rate-cut path.

EUR/USD closed marginally higher on Monday but retreated to the 1.0850 area early Tuesday. Eurostat will release Producer Price Index (PPI) data for January later in the session.

The data from Japan showed early Tuesday that Tokyo Consumer Price Index jumped to 2.6% on a yearly basis in February from 1.8% in January. Tokyo CPI ex Food and Energy edged lower to 3.1% from 3.3% in the same period. USD/JPY showed no immediate reaction to these reading and was last seen moving sideways at around 150.50.

Japanese Yen bulls shrug off stronger Tokyo CPI print, subdued USD price action.

While speaking at the National People's Congress (NPC) annual meeting on Tuesday, China’s Premier Li Qiang noted that the foundation of China's economic recovery is not solid yet. According to Reuters, China is expected to set a growth target of 5% for 2024. AUD/USD came under bearish pressure during the Asian trading hours and was last seen losing nearly 0.5% on the day at around 0.6480.

Australian Dollar moves below a psychological level amid a stable US Dollar.

GBP/USD closed the second consecutive trading day in positive territory on Monday but reversed its direction after encountering resistance at around 1.2700. The pair stays on the back foot early Tuesday and edged lower toward 1.2670.