No surprise from the FOMC Meeting Minutes

Yann Quelenn Swissquote Bank Ltd

According to the Fed meeting minutes released yesterday, interest rates will be raised in the “near term”. Markets’ expectations regarding a rate hike have not changed much and are still standing above 90%. The fed was clearly not in a hurry to send a very hawkish signal.

The inflation remains one very important topic and in particular the path consumer prices will take. Minutes show that the debate is still open amongst policymakers regarding inflationary pressures. In our view and as we mentioned yesterday we rather believe that there are strong inflationary pressures but the predictable inability to raise rate above a certain level – Risk of bursting the bond bubble would be very high - obliges the Fed to send mixed signals on inflation. Yellen’s comment stating “We are monitoring inflation very closely” seems contradictory with the reality of the monetary policy.

Stay on top of the markets with Swissquote’s News & Analysis

It is going to be very tough to switch a very loose monetary policy from a tighter one. Inflation is now there and will help to kill the massive debt accumulated. Right now, the dollar continues to weaken against the single currency.

Author

Yann Quelenn

Swissquote Bank Ltd

Yann Quelenn is a Market Analyst at Swissquote Bank with strong technical and financial background. Previously, he worked as FX Trader at Banque Privée Edmond de Rothschild and as Portfolio Manager at Polaris Investment in Luxembourg.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.