Forex Today: Speculative interest more concerned than policymakers

Valeria Bednarik FXStreet

What you need to take care of on Friday, September 9:

The greenback finished the day mixed across the FX board after a volatile day. The EUR/USD pair is little changed, just below parity after the European Central Bank hiked rates by 75 bps as expected.

The ECB upwardly revised the inflation projections to an average of 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024. Policymakers also expect the economy to keep growing regardless of signs of recession, with the annual GDP seen up by 3.1% in 2022, 0.9% in 2023 and 1.9% in 2024.

The speech from President Christine Lagarde shed some light on future actions. She said it would take more than two meetings but less than five to get to the end of rate hikes, which is taking them to neutral levels. At the same time, she cooled down expectations of another 75 bps hike by saying it is not a norm but added that they could go for higher increases if needed.

US Federal Reserve Chief Jerome Powell delivered remarks on local inflation and monetary policy. Among other things, Powell said that the pandemic is the main reason behind the current situation, and repeated policymakers are strongly committed to bringing inflation down, as the longer it remains above target, the greater would be the risk.

As several other worldwide central bank leaders, Powell and Lagarde put taming inflation before stimulating growth. Lagarde diminished risks of recession but market players are well aware the energy crisis is yet to take its toll on the Union.

In the UK, the new Prime Minister Liz Truss announced a cap on household energy bills starting October 1. The government also announced it will put in place an equivalent cap for businesses' energy costs. The GBP/USD pair eased with the news, ending the day at around 1.1500.

The Canadian dollar surged against the greenback, with the pair trading at around 1.3090 as BOC officials reiterated more rate hikes are in the docket as inflation remains stubbornly high. AUD/USD trades little changed at around 0.6750.

The USD/CHF pair plunged, now trading at around 0.9700, while USD/JPY steadies at around 144.00.

Gold ended the day with losses at around $1,708 a troy ounce, while crude oil prices posted modest gains, with WTI ending the day at $83.25 a barrel.

US Treasury yields finished the day with modest gains. The 10-year note currently yields 3.29% not enough to trigger demand for the greenback but getting close to it.

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Shakeouts, Fakeouts, Hopes & Dreams pt.3

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

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.