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· Dollar pinned near six-week low as focus turns to Powell

The dollar nursed losses near a six-week low on Tuesday while commodity currencies loitered around multi-year highs, as investors’ focus shifted to how U.S. Federal Reserve chief Jerome Powell might respond to resurgent inflation expectations.

Surging prices for materials from oil and copper to lumber and milk powder have pushed currencies such as the Australian and New Zealand dollars to their highest in nearly three years.

However the gains have come with a worldwide rise in inflation expectations and a big sell-off in longer-dated bonds.

Traders expect Powell, who testifies before Congress at 1500 GMT, to provide some reassurance that the Fed will tolerate higher inflation without immediately hiking rates, which they said could calm bond markets and eventually weigh on the dollar.

“I think he will talk up the downside,” said Commonwealth Bank of Australia currency analyst Joe Capurso in Sydney.

“If anything, I think he will give markets a bit of a cold shower and say: ‘Mr Market you’re getting a bit ahead of yourself. There are plenty of risks...and the U.S. economy is long, long way from full employment.’”

Morning moves were slight ahead of his appearance, but renewed confidence that low U.S. interest rates will not lift anytime soon can likely clear the way for further gains in trade-exposed currencies at the dollar’s expense.

The U.S. dollar index sat at 90.019 on Tuesday, just above its lowest since mid January. The Australian dollar last bought $0.7913 and the kiwi $0.7323, with both trading broadly steady early in the Asia session.

The euro made a small gain to $1.2165 and is poised to re-test resistance around $1.2220.

Sterling, which has rallied nearly 3% this year as a speedy vaccine rollout has inspired confidence in the prospect of a British economic rebound, held above $1.40 at $1.4067.

The Japanese yen, which has been the worst performing major currency of 2021 because it is sensitive to tumbling U.S. Treasury prices, steadied at 105.02 per dollar.

Elsewhere bitcoin steadied above $50,000 after a wild overnight ride where it traded in a $10,000 range and dropped as low as $47,400.

· Bitcoin collapses below $50,000 as Musk effect exacerbates profit-taking

Bitcoin (BTC/USD) has been tumbling down since Elon Musk tweeted that its value "seems high" over the weekend. After topping $58,000 and a valuation of over $1 trillion, the granddaddy of cryptocurrencies has collapsed over $10,000.

Ethereum Price Prediction: ETH eyes a 40% drop as it nears the end of a rising wedge

Ethereum price has dropped approximately 10% since it hit a new all-time high at $2,034 on February 20. At the time of writing, ETH price is trading just above the lower trendline of the rising wedge, waiting to establish a direction.

· Ethereum Drifts Lower as Transaction Fees Soar, Bitcoin Falls

Ethereum prices plummeted during the previous session and continue to trade weak into Tuesday after DeFi platforms liquidated around $25 million worth of assets – the highest amount of liquidations seen on a single day since late November. At the time of writing, ETH is trading around $1,560.

Ethereum transaction fees are soaring to new highs, driving many users away from the second most popular cryptocurrency. High-speed transaction costs crossed $50 level while the average-speed transactions set users back by around $30, and low-speed transactions – that take over one hour for processing, now cost around $26.

· Rising bond yields are a reflection of growth optimism, says JPMorgan

Julia Wang of JPMorgan Private Bank says Asia’s growth impulse is “really strong.”

· Pfizer to ship 13 million COVID-19 vaccine doses per week to U.S. by mid-March, says executive

Pfizer Inc expects to deliver more than 13 million doses of its COVID-19 vaccine per week to the United States by the middle of March, more than doubling its shipments from early February, a top Pfizer executive said in prepared testimony ahead of a Tuesday congressional hearing.

· Global daily statistics

COVID-19 infections are still rising in 45 countries. There have been at least 111,699,000 reported infections and 2,577,000 reported deaths caused by the new coronavirus so far.

Vaccination

So far 91 countries have begun vaccinating people for the coronavirus and have administered at least 207,719,000 doses of the vaccine.

· Deaths from COVID-19 in the United States fell for a third straight week last week, as cases and hospitalizations both showed steep drops.

The positive trends come as the U.S. death toll from the pandemic hit 500,000, though health experts have warned about a possible resurgence in cases due to new and more contagious variants of the coronavirus.

· England must come out of pandemic safely, not rush, minister says

The British authorities are determined to lead England out of the pandemic as fast as safely possible, but no faster, Health Secretary Matt Hancock said on Tuesday when asked about the cautious pace of a roadmap announced a day earlier.

“We’re all absolutely determined to come out of this as fast as safely possible, but no faster,” Hancock said on Sky News.

· UK jobless rate rises to highest since early 2016 at 5.1%

Britain’s unemployment rate rose to 5.1% in the last three months of 2020, official data showed, its highest since the first quarter of 2016 but still a lot lower than it would have been without the government’s coronavirus jobs support scheme.

Separate data from the Office for National Statistics showed that the number of employees on company payrolls in January rose by 83,000 from December.

The jobless rate was in line with the median forecast in a Reuters poll of economists.

The January increase in payrolled employees between December and January was the highest since January 2015.

· French labour minister urges companies to boost remote working to avoid lockdown

French Labour Minister Elisabeth Borne said on Tuesday it was paramount that companies boost remote working to avoid having to resort to a new lockdown to fight the spread of COVID-19.

· Online bank backed by Alibaba’s Ant Group joins China’s digital yuan pilot

· China's home prices see mild increases in January

New home prices in four first-tier cities - Beijing, Shanghai, Shenzhen and Guangzhou - rose 0.6 percent month on month in January, compared with a 0.3-percent increase registered in December, according to data from the National Bureau of Statistics.

· China condemns Canada's motion calling treatment of Uighurs genocide

China said on Tuesday that it condemned and rejected Canada’s parliament passing a non-binding motion saying China’s treatment of Uighurs is genocide.

China have lodged stern representations with Canada, the foreign ministry spokesman Wang Wenbin told a regular briefing.

· Hong Kong’s Carrie Lam defends China’s plans to ensure ‘patriots’ lead city

Hong Kong’s Chief Executive Carrie Lam endorsed plans by Beijing to ensure “patriots” rule the city, saying on Tuesday they were needed to stop hatred of China and sustain the ‘one country, two systems’ governance model for the Asian financial hub.

· Pfizer's COVID-19 vaccine gets nod in South Korea from first of three expert panels

· New Zealand coronavirus cluster grows with three new cases

New Zealand reported three new locally transmitted cases of coronavirus on Tuesday, as the cluster in its biggest city of Auckland expanded just days after authorities were forced to impose fresh curbs.

· Australia to ramp up COVID-19 vaccination drive as more doses arrive

Australia will ramp up its COVID-19 immunisation drive with more shots to be rolled out from next week, federal Health Minister Greg Hunt said on Tuesday, after a second shipment of the vaccine reached the country overnight.

About 166,000 doses of the vaccine developed by Pfizer Inc and Germany’s BioNtech arrived late Monday, authorities said, as the country entered the second day of a nationwide inoculation programme.

Total weekly doses will be raised to 80,000 next week from 60,000 doses this week, with the number expected to reach 1 million a week by the end of March when CSL Ltd begins to locally produce the AstraZeneca vaccine.

· Facebook cuts deal with Australia, will restore news pages in the coming days

Facebook has reached an agreement with the Australian government and will restore news pages in the country days after restricting them.

· Iran stops snap nuclear inspections, state-run daily urges caution

An Iranian government newspaper warned on Tuesday that overly radical actions in the nuclear wrangling with the West may lead to the country’s isolation after Tehran ended snap inspections by United Nations inspectors.

Iran’s envoy to the International Atomic Energy Agency, Kazem Gharibabadi, said it had ended implementation of the so-called Additional Protocol at midnight (2030 GMT) on Monday. The agreement allowed the IAEA to carry out short-notice inspections.

· A U.S.-Iran deal is ultimately possible because Iran needs money, analyst says

Washington and Tehran will ultimately be able to strike a nuclear agreement because Iran needs relief from economic sanctions, according to a senior advisor at a U.S. think tank.

“I think, ultimately, a deal is possible because the Iranians need money,” said Richard Goldberg of the Foundation for Defense of Democracies.

The U.S. and Iran both appear interested to return to the negotiating table, but have not been able to agree on who should make the first move. The Biden administration last week offered to begin talks with Tehran, but Iran has repeatedly stressed that the U.S. must lift sanctions to kickstart the process. Washington has resisted those calls so far.

· G7 foreign ministers condemn violence against Myanmar protesters

· Oil prices jump more than $1 as U.S. output slow to restart

Oil prices jumped by more than $1 on Tuesday, underpinned by optimism over COVID-19 vaccine rollouts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut in crude production last week.

Shale oil producers in the southern United States could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output that shut down because of cold weather, as frozen pipes and power supply interruptions slow their recovery, sources said.

Brent crude was up $1.08, or 1.7%, at $66.32 a barrel by 0437 GMT, after earlier hitting a high of $66.79. U.S. crude rose 92 cents, or 1.5%, to $62.62 a barrel, having reached a session high of $63. Both benchmarks have risen more than 2% on Tuesday after climbing nearly 4% in the previous session.

· Goldman raises oil forecast, sees jump to $72 this year for U.S. prices

Goldman Sachs is raising its oil price forecast as three key factors should drive prices higher: low inventories, a slow return to prior production levels and speculative inflows. The firm now sees West Texas Intermediate crude hitting $72 by the third quarter, with Brent crude reaching $75. Goldman’s prior forecast had Brent at $65 during the third quarter.

Reference: CNBC, Reuters