FOMC left federal funds rate in 1.25% - 1.50% range, as expected. The statement was seen as slightly more hawkish than expected. March hike appears to be a done deal with some quarters now expecting as many as four rate hikes this year. U.S. dollar looks supported but will it last?
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Fed to hike three more times in 2018
Fed hiked three times this year, which is at least one hike more than markets expected at the start of the year. FOMC's dot plot implies three hikes in 2018, markets are again not that hawkish. With so much money in the system and stock market seemingly engineered to go just up, federal funds rate could end up much higher than anyone expects. On the other hand, stock market bears have grown surprisingly quiet.
U.S. dollar sold after FOMC decision
FOMC hiked federal funds rate by 25 basis points, as expected. Kashkari and Evans dissented. Rate statement hasn't changed much. Initial reaction was to sell the dollar, then shorts got squeezed but the dollar looks heavy across the board. Let's see what Janet Yellen has to say on her farewell press conference in a couple of minutes.
FOMC rate hike
On Wednesday, FED raise hike interest rate from 1% to 1.25%. This is the second time FED has hiked rate this year. Its likely to hike another one in December. The hike has introduced volatility in USD probably because the hike is already priced in or because of Trump's desire for weaker USD, EURUSD has moved from around 1.1200 at FOMC hike to 1.1285 , then fall to 1.114.
U.S. dollar recovers after hawkish FOMC decision
Fed's FOMC was surprisingly hawkish yesterday. They hiked federal funds rate by 25 basis points, as expected, and outlined strategy for reducing their balance sheet. FOMC chair Yellen told reporters that the balance sheet adjustment could begin "relatively soon".
Just a couple of hours before the FOMC decision, both inflation and retail sales reports came in weak and markets sold U.S. dollar on speculation that the FOMC will postpone hiking until data improves. The dollar recovered and followed …
Just a couple of hours before the FOMC decision, both inflation and retail sales reports came in weak and markets sold U.S. dollar on speculation that the FOMC will postpone hiking until data improves. The dollar recovered and followed …
EUR/USD Bound range
The EUR/USD pair is in range bound in and tight trading, as European markets are closed due to Labor Day but in US,personal income in March raise by 0.2%, less than expected, while spending remained flat. Core PCE inflation fell monthly basis by 0.1% as expected, whilst the annual reading came in at 1.6%, below previous 1.8%. Tepid inflation figures cooled the case for a June rate hike ahead of Fed's meeting later this week will be the key to break range bound.
USD/JPY rallies as FOMC upgrades tightening path
FOMC didn't disappoint yesterday. Federal funds rate corridor was hiked by 25 basis points, as widely expected. Even though the bank remains cautious, the dot plot was upgraded to reflect three hikes (from two in September) in 2017. That was enough for the dollar to rally.
USD/JPY blasted through the strong resistance (now support) area between 115.50 and 116 and added nearly 190 pips on the day. The momentum carried on overnight with 118 proving to be a bit of a hurdle. Closing the year in gree…
USD/JPY blasted through the strong resistance (now support) area between 115.50 and 116 and added nearly 190 pips on the day. The momentum carried on overnight with 118 proving to be a bit of a hurdle. Closing the year in gree…
Loonie breaks 1.38
After months of preparations and signaling, FOMC finally decided to hike federal funds rate. The rate was at the record low of 0 - 0.25% for the past seven years (since December 2008). Last time that the rate was hiked was nearly ten years ago (in June 2006). New band for the rate is 0.25% - 0.50%.
A couple of hours before the decision, much weaker than expected crude oil inventories report sent the Loonie to new eleven-year high (~1.3850), above the June 2004 high (~1.3820). The decision led to…
A couple of hours before the decision, much weaker than expected crude oil inventories report sent the Loonie to new eleven-year high (~1.3850), above the June 2004 high (~1.3820). The decision led to…
Fed holds rates
At its two day meeting that concluded yesterday, FOMC decided to leave Federal Funds Rate in 0.0% - 0.25% range. Disinflationary implications of slowing global growth, oil weakness and US dollar strength are the main reasons why the committee stood pat.
The dollar was sold across the board but it retraced most of its losses against the commodity currencies. Euro was the winner of the day as it rose nearly a cent and a half. Swissie and Cable both moved close to 100 pips on the day and Yen about …
The dollar was sold across the board but it retraced most of its losses against the commodity currencies. Euro was the winner of the day as it rose nearly a cent and a half. Swissie and Cable both moved close to 100 pips on the day and Yen about …