The U.S. dollar climbs despite strong risk appetite (Daily analysis 3.02.2021)

The risk environment remains benign, yet the U.S. dollar trades firm. Crude oil benchmarks maintain an upward trajectory and equities bounce.

The EUR/USD pair is close to 1.20 mark, and the USD/JPY is glued to 105.00 area. Rising commodity prices have helped the Norwegian krone and the Canadian dollar withstand the U.S. dollar's revival.

The New Zealand dollar remains supported as well due to the good performance of the jobs market. The unemployment rate declined in Q4. Therefore further monetary easing should not be taken for granted. Interestingly, the Russian ruble fails to benefit from the recent spike of oil prices due to social unrest and the threat of sanctions after Aleksey Navalny was sentenced. The Russian currency, which performed strongly in Q4 2020, may face further headwinds as market positioning looks stretched and further nervousness might trigger a knee-jerk reaction.

On the contrary, the Polish zloty continues its mini-rally. The EUR/PLN declined below 4.50, a level that had previously been perceived as likely to push the National Bank of Poland to buy foreign currencies. The latest developments have made today's MPC meeting a little more interesting. Other key events to monitor are U.S. data releases: ADP employment report and ISM services index.