The US Dollar lost ground in the late New York session after the Federal Open Market Committee (FOMC) of the US Federal Reserve left rates on hold, but did not deliver the expected language on tapering the quantitative easing program that the markets had hoped for. Rather, the apex bank […]
The latest Federal Reserve news today is the FOMC rate statement and press conference by the FOMC Chair, Jerome Powell which took place on Wednesday, January 29, 2020. The markets had priced in zero chance of an interest rate adjustment, and that was what the Federal Reserve’s FOMC delivered. Unlike the previous FOMC rate statements of the last six months, this particular decision did not elicit any market reaction as it did not constitute any market surprise. Notable actions taken by the FOMC include the hike of the Interest on Excess Reserves (IOER) as well as the overnight reverse repo rates by 5bps each.
The press conference by the FOMC Chair did not produce remarkable market-moving information. Reporters pressed Jerome Powell on a range of issues, such as monetary policy direction as well as the timetable for repo market action by the FOMC. Powell also faced questions on specifics of the repo market purchases by the FOMC.
Powell’s responses had two critical points. One was the comment on inflation; Powell said the FOMC was unhappy about the current inflation levels. He further stressed the desire of the FOMC to see the inflation rate “returning” to the 2% target. This is in opposition to previous statements where the word “near” is used in referring to rising inflation.
While non-committal when pressed on the coronavirus issue, he stressed that the FOMC would continue its repo market operations well into the 2nd quarter of 2020.
Markets are factoring in at least one more rate cut, as Powell’s speech was perceived as having a slightly dovish twist. However, any perceived dovishness was not strong enough to cause significant volatility on the US Dollar.
The S&P 500 index is marginally higher on the day, after touching off new all-time highs at 4197.0. This high remains slightly short of the 4200 initial resistance forecast by Credit Suisse analysts a few weeks ago. Low-volume trade is the hallmark of today’s open, as investors remain on the […]
Speculation that the FOMC may deliver a timetable for the tapering of its QE program when it ends its meeting today is strengthening the US Dollar across the board. This has allowed the USD Index to gain 0.13% on the day, challenging the resistance at the 90.965 price level. Traders […]
The GBP/USD is one of the currency pairs in focus as the Federal Open Market Committee (FOMC) of the US Federal Reserve Bank decides on its monetary policy direction today. The GBP/USD has been facing significant headwinds of late. In early April, rising bond yields allowed the greenback to gain […]
Following the dip in crude oil prices on the day, the USD/CAD has retained upside momentum ahead of the FOMC minutes. Furthermore, trade balance data from Canada showed a larger-than-expected narrowing of the February 2021 trade surplus, Trade surplus registered at C$1.0 billion, which was less than the C$1.3 billion […]
The USD Index remains at 2-week lows as investors stand pat in anticipation of the FOMC minutes, due for release later today. Falling bond yields continue to be a bearish factor for the greenback this week, as traders wait to see if the Fed’s minutes will show a path to […]
The FOMC has held rates at 0.25% as widely expected by market analysts. However, it is the contents of the rate statement that is starting to create dovish pressures on the US Dollar. The markets were watching for the median dot plot for 2023. Despite initial feelers that there will […]
The USD Index continued its upward march, albeit in muted fashion as the greenback continues to be buoyed by the activity in the US bond market. US 10-year Treasury yields is up 2.73% as of the time of writing, allowing the greenback to ignore downbeat economic data in the housing […]
The New Zealand Dollar comes into focus as the country prepares to release the latest consignment of the GDP figure. Analysts expect that the GDP will come in at 0.2%, representing a slower but more consistent pace of growth than the previous reading of 14%, which was more of a […]
The EUR/USD has reversed gains made earlier in the session and is now trading lower. Despite a slump in retail sales in February, and the German ZEW/EMU Economic Sentiment beating expectations, the US Dollar was able to reverse earlier losses against the Euro and has turned the tide against the […]