Fed Chair Yellen faced something of an impossible task yesterday and the fact that the dollar is net-net little changed vs. levels prior to her testimony reflects that. Yes, the dollar did see some moves, but this was more down to position adjustment, with many having held back until the major event of the week was well under way. Ultimately, the Fed implicitly acknowledged that the outlook was less certain since the December tightening of rates, but was not willing to countenance the possibility of a reversal this year. But overall, as I suggested, the Fed is currently in a situation where it can do little to counteract the risk aversion in markets currently being seen.
As the world worries about the impact of negative interest rates, the Swedish Riskbank is the undoubted expert and has plunged their key rate further into negative territory this morning, cutting from -0.35% to -0.50%. The market was fairly split on the possibility of a move, so the Swedish Krone has reacted negatively in the wake of the decision, EURSEK moving to the 9.60 level in early trade. We’re also seeing the yen plunge further, through the 112.00 level, having been at 116.00 just 1 week ago. The BoJ’s move to negative rates (on proportion of reserves) looks a distant memory now, with the BoJ no doubt frustrated with the yen’s behaviour since that time. But the dollar is gaining against the Aussie and sterling in early European trade, reflecting the fact that the FX market has become more complex in its dynamics and the dollar is far from a simple risk or policy play. No key data releases for today beyond the usual US weekly claims data at 13:30 GMT.
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.