Fed's Daly: Fed is not done yet but PCE data is good news

Eren Sengezer FXStreet

Federal Reserve (Fed) Bank of San Francisco President Mary Daly told CNBC on Friday that cooling inflation shows that the Fed's monetary policy is working, per Reuters.

Key takeaways

"Fed is not done yet but PCE data is good news."

"Getting evidence that policy is tight enough."

"It's taking longer for policy to work but it is working."

"If inflation stays sticky or comes down slowly, rates would need to be higher for longer."

"If inflation comes down or labor market falters, can adjust policy."

"Too early to tell on policy."

"Will pay attention to both sides of Fed mandate."

"Hearing from business CEOs they already feel uncertain."

"Fed is apolitical, won't talk about presidential debate."

"Monetary policy is working."

Market reaction

These comments failed to have a noticeable impact on the US Dollar's valuation. At the time of press, the US Dollar Index was down 0.05% on the day at 105.85.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Bitcoin has found or is near a bottom, extended consolidation to follow: K33

Bitcoin (BTC) is nearing or has already established a bottom, which could be followed by a sustained period of slow price movement, according to K33.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.