ECB Monetary Policy Statement, U.S. Jobless Claims, Powell Testimony

The EUR/USD pair managed to surpass the barrier of 1.0900 on Wednesday ending the session 0.40% higher and advancing to multi-week tops after the discouraging prints from the ADP report and the lack of surprises from Fed Powell's testimony.

Powell suggested that interest rate reductions are probable within the year. However, such cuts will only be implemented once the Fed acquires greater confidence in the trajectory of inflation returning to its annual target of 2%.

Fed Chair Powell will be speaking again today for the second half of two-day testimony before the US Congressional House Financial Services Committee.

The European Central Bank (ECB) is set to announce its Monetary Policy Decision later in the day. The ECB is anticipated to maintain the Rate on Deposit Facility at 4.0%, marking the fourth consecutive meeting without a change.

Gold rallied to a record on Wednesday, building on positive momentum driven mostly by bets for U.S. monetary easing. Gold got an additional fillip as the dollar fell after Fed Chair Jerome Powell indicated a rate cut later this year. Gold prices ended the session on Wednesday 0.91% higher above the level of $2145,00 per ounce.

Powell said in an overnight testimony that the Fed did intend to cut interest rates in 2024- a scenario that bodes well for non-yielding assets such as gold.

Focus is now squarely on key nonfarm payrolls data due on Friday, for more cues on the labor market, which is also a key consideration for the Fed in adjusting rates.

Oil prices edged up about 1% on Wednesday on a smaller-than-expected build in U.S. crude inventories, a big withdrawal from distillate and gasoline stocks and remarks by the U.S. Federal Reserve chief that he still expects interest rate cuts this year.

The U.S. Energy Information Administration (EIA) said energy firms added a smaller-than-expected 1.4 million barrels of crude into stockpiles during the week ended March 1, while distillate and gasoline inventories fell by much more than expected.

Tensions in the Red Sea, a key oil shipping route, ratcheted up and raised supply disruption fears after a Houthi missile attack struck a Greek-owned cargo ship, near Yemen, killing at least two people.

Wall Street's three major indexes closed higher on Wednesday as economic data and comments from Federal Reserve Chair Jerome Powell reinforced expectations that the U.S. central bank would reduce its benchmark interest rate this year. At the close, US 500 added 0.41% while US 30 and US Tech 100 gained 0.16% and 0.31% respectively.

Data showed U.S. private payrolls increased slightly less than expected in February. The Job Openings and Labor Turnover Survey (JOLTS) showed job openings fell marginally in January, while hiring declined as labor market conditions continued to gradually ease.