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 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 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 […]
The US Dollar continued to rally against gold prices as the Fed kept interest rates intact. Gold prices have ended the day 0.5% lower, after the US Dollar maintained its bullish push on Wednesday following the FOMC monetary policy meeting. The accompanying statement by the Fed had a switch in […]
The EUR/USD price is little changed today as traders wait for the Fed interest rate decision and the US durable goods data that will come out later today. The EURUSD is trading at 1.2165, which is in the same range where it was yesterday. FOMC preview: The FOMC will conclude […]
Gold price on the XAUUSD pair maintained the bullish push that has extended into the 3rd day, taking it to one-month highs on the back of more aggressive selling on the greenback. The USD was offered heavily on Thursday after the FOMC statement yesterday indicated the bank’s willingness to use […]
Gold price is up sharply today as traders react to the Fed interest rate decision and the overall shift to alternative assets. XAU/USD is trading at $1,875, which is the highest it has been since November 20 this year. What happened: Gold is usually traded in dollars. It is also […]
The US Dollar is gaining broadly after the FOMC opted to leave rates unchanged at 0.25%. Additionally, the Fed is committing to use the “full range of its tools to support the economy”. Purchases of $40 billion worth of agency-backed securities and $80 billion a month in US government bonds will […]
The Dow Jones Industrial Average is down by 0.2% this Wednesday ahead of the FOMC decision. The US markets came under pressure after disappointing retail sales data. Retail sales came in at -1.1% for the month of November, which was lower than the -0.3% market expectation and also much lower than […]