Forex Today: King Dollar crowned by the Fed, antipodeans fight back, gold melts


Here is what you need to know on Thursday, June 17:

The dollar is holding onto gains triggered by a surprisingly hawkish Fed decision, while gold is licking its wounds. The bank signaled tapering is on the agenda and raised its forecasts. The Aussie and the kiwi fought back in response to robust data  US jobless claims and the Swiss rate decision are eyed. 

Tapering and hikes: The Federal Reserve surprised markets by signaling two rate hikes in 2023 and the beginning of a discussion about tapering bond buys in the coming meetings. The bank also upgraded growth and employment forecasts, while limiting inflation increases to 2021. 

Federal Reserve ups the ante on inflation, growth and interest rates

The dollar surged in response to the dot-plot and held up after Fed Chair Jerome Powell only marginally distanced himself from the dots. He sounded upbeat on employment and about normalizing policy. Bond yields leaped, with returns on 10-year Treasuries hovering around 1.57%, and gold tumbled toward $1,800.

EUR/USD tumbled below 1.20 ahead of final inflation figures from the eurozone for May. GBP/USD slipped below 1.40, also due to a rapid increase in COVID-19 cases in Britain. The Delta variant is wreaking havoc. 

AUD/USD stands out with a swift recovery after Australia reported a whopping increase of 115,200 jobs in May and a drop in the Unemployment Rate to 5.1%. NZD/USD benefited from a rapid recovery in New Zealand – a growth of 1.6% in the first quarter. 

The Swiss National Bank is set to leave its internet rate unchanged at -0.75%, the same negative rate since 2015. The SNB has vowed to intervene and weaken the currency in the past. 

Cryptocurrencies have edged lower, with Bitcoin sliding under $39,000 and Ethereum on the defensive above $2,400. Shiba Inu is experiencing substantial volatility. 

US weekly unemployment claims are set to remain under 400,000 for yet another week and the Philly Fed Manufacturing Index is projected to drop from 31.5 points seen in May. 

US President Joe Biden is back in Washington after a summit with Russian President Vladimir Putin. The closely watched meeting in Geneva resulted in small gestures and many disagreements, yet had no effect on markets. Investors are interested in bipartisan talks about an infrastructure bill

 


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD remains depressed below 1.1850 after the Fed's taper talk

EUR/USD is trading under 1.1850, hit by hawkish comments by the Fed's Clarida and Daly. The bank is nearing tapering its bond-buying scheme, a move that could happen this year. US jobless claims and a speech from the Fed's Waller are eyed.

EUR/USD News

GBP/USD flirts with 1.3900 ahead of the BOE's Super Thursday

GBP/USD is licking its wounds around 1.3900 ahead of the BOE’s Super Thursday rate decision in which it also releases new forecasts. Declining covid cases are supporting sterling while hawkish comments from the Fed's Clarida are boosting the dollar.

GBP/USD News

XAU/USD off highs, steady around $1810 ahead of BOE, US data

Gold price is trading almost unchanged on the day, unable to hold at higher levels, despite the latest pullback in the US dollar across the board. The cautious tone across the European markets fuelled the risk-off flows in the US Treasuries, downing the yields alongside the dollar.

Gold News

Cryptocurrency markets make comeback as BTC bulls resurface

Bitcoin price taking a second attempt at an upswing to retest $42,451. Ethereum price has flipped a crucial resistance level at $2,640 into a support barrier.

Read more

Bank of England Preview: Five reasons the doves are set to win Super Thursday

An epic battle between hawks and doves on Super Thursday? That is a dramatic way to view the Bank of England's upcoming rate decision – yet there are good reasons to expect doves to carry the day. That would send sterling down. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures