HFM information and reviews
HFM
96%
Octa information and reviews
Octa
94%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%

Dollar pulls back; ECB sends clearer cut signals


12 April 2024 Written by Raffi Boyadjian XM Investment Analyst Raffi Boyadjian

Fed officials say rate cut not imminent

The US dollar pulled back against most of its major peers yesterday, taking a breather following Wednesday’s CPI-related rally, perhaps as the softer-than-expected PPI numbers allowed traders to lock in some profits.

Having said that though, the market’s perception about how the Fed needs to move forward has not changed, with Fed funds futures still pointing to 43bps worth of rate reductions by the end of the year.

This was probably due to remarks by a couple of Fed policymakers, who signaled no urgency to ease monetary policy anytime soon. Both New York Fed President Williams and Richmond Fed President Barkin noted that their confidence towards achieving their target has not increased and that there is no need to move to an easier monetary policy yet.

Their comments were echoed by Boston Fed President Susan Collins, who added that a strong labor market is also reducing the urgency to ease. Indeed, jobless claims for last week corroborated her view by sliding more than anticipated.

Euro extends fall as ECB moves closer to a cut

The euro was among the currencies that failed to benefit from the dollar’s pullback and responsible for this was the ECB. The European Central Bank kept interest rates unchanged as expected yesterday but sent clearer signals that it may start lowering them soon.

In the statement accompanying the decision, officials noted that if their confidence that inflation is converging to their target increases, then it may be appropriate to reduce the current level of policy restriction, while at the press conference, President Lagarde said that the decline in inflation is comforting them and that a few members felt sufficiently confident to cut rates.

Although she did not explicitly telegraph a June rate cut, a few hours after her speech, a report citing three sources close to the ECB discussion revealed that policymakers still expect to cut interest rates in June.

With the Fed now seen as more likely to begin cutting interest rates in September, this divergence in monetary policy expectations could continue weighing on euro/dollar, perhaps driving it below the 1.0665 zone that offered support in November.

Japan’s Suzuki drops fresh intervention warnings

The yen was also unable to recover ground, with dollar/yen hitting a fresh 34-year high even as Japanese Finance Minister Suzuki dropped fresh warnings about excessive yen moves. Although he repeated that they are not looking at levels themselves, he added that they are monitoring the moves with a high sense of urgency.

Having said that, he refrained from clarifying whether the latest move on the US CPI numbers is deemed excessive, allowing dollar/yen buyers to stay in the game.

Stocks rebound; gold keeps defying gravity

On Wall Street, the Dow Jones closed the session virtually unchanged, but both the S&P 500 and the Nasdaq finished in the green, with the latter gaining nearly 1.7%. This suggests that tech-related momentum remains elevated, with investors perhaps still trying to pencil in future growth opportunities relating to artificial intelligence (AI).

Although the CPI numbers triggered some liquidation due to reduced rate-cut expectations, the fact that yesterday’s PPI data did not corroborate the picture painted by the CPI figures may have encouraged fresh buying.

Gold traders also added to their long positions, with the precious metal hitting a fresh record high today. Gold’s quick recovery confirms that its main driver nowadays is not speculation about the Fed’s future course of action, but rather, elevated Chinese demand and geopolitical uncertainty.

by XM.com

#source


RELATED

Oil slumps after Israel's attack; yen slips on Japan election shock

Oil prices tumbled as trading got underway on Monday, opening with a gap down as investors responded to Israel’s retaliatory attack against Iran on Saturday.

28 Oct 2024

Stocks under pressure amid US election jitters, dollar extends gains

The rally on Wall Street came to an abrupt end this week as uncertainty about the looming US presidential election as well as about the pace of Fed rate cuts undermined confidence in risk assets.

24 Oct 2024

Gold and dollar edge up as markets bet on Trump win

Gold extended its record streak at the start of the new trading week as investors increasingly bet on Donald Trump winning the US presidential election on November 5.

21 Oct 2024

US dollar could benefit from an unexciting ECB meeting

The euro remains on the back foot as it continues to underperform the dollar. The pair has dropped to the lowest level since August 2 with October shaping up to be the weakest month for euro/dollar since May 2023.

17 Oct 2024

Stocks under pressure by chipmakers, pound slips on CPI drop

Equity markets suffered a setback on Tuesday after Dutch semiconductor giant, ASML, sparked panic about the demand outlook for chips when it accidentally published its earnings report a day early.

16 Oct 2024

Dollar edges up, stocks muted as China stimulus underwhelms

Chinese officials unveiled more measures to shore up the country’s embattled property sector while also pledging further support for businesses and consumers in two separate announcements on Saturday and Monday.

14 Oct 2024

Wall Street hits new record after Fed minutes, CPI eyed next

Fed minutes show split over September cut but Wall Street rallies; Dollar eases from near 2-month high as focus turns to CPI report; Gold and oil steadier after recent losses

10 Oct 2024

Risk appetite ebbs as markets fret over China stimulus, Fed rate cuts

Chinese traders returned from a week-long holiday today and hopes were high that the government would unleash more big packages to support the flagging economy.

8 Oct 2024

Will the dollar or stocks smile after the non-farm payrolls print?

Spotlight falls on the key US labour market data. Non-farm payrolls to rise by 140k, but could surprise to the upside. Dollar to enjoy a strong set of data, equities prefer weaker prints. Euro suffering continues, while both gold and oil advance.

4 Oct 2024

Markets maintain upbeat mood ahead of PCE inflation

China stimulus and rate cut bets propel stocks higher. Dollar caught in choppy trading as crucial inflation data awaited. Yen surges as new LDP leader in favour of rate hikes set to become PM.

27 Sep 2024

Euro sinks on poor PMIs, dollar firms ahead of Fedspeak

Eurozone PMIs dip into contraction zone, euro takes a dive. Stocks mixed as weak PMIs offset optimism about China stimulus. Dollar edges up as after Waller comments. Powell and PCE inflation eyed next.

23 Sep 2024

Daily Comment Let the Fed rate cuts begin

Dollar trades indecisively ahead of important Fed decision. Investors assign a strong 60% chance for a 50bps cut. Wall Street and gold traders also on the edge of their seats. Pound rebounds on sticky UK inflation.

18 Sep 2024

Dollar sinks, gold surges as 50bps Fed cut back in the picture

Soft US PPI and reports of Fed dilemma revive bets of 50bps cut; Dollar plunges as yields fall, pushing gold to new all-time high. Euro climbs as ECB trims rates but does not signal October cut.

13 Sep 2024

Dollar firms after CPI, euro awaits ECB, techs lead equities rebound

US dollar edges up after CPI report wipes out 50-bps rate cut bets. Euro stuck on the backfoot in wait for ECB decision. Wall Street rebound gathers pace as tech stocks rally.

12 Sep 2024

Dollar and equities rebound from NFP-led losses as focus turns to US CPI

US jobs report adds to slowdown fears but provides no clarity about Fed policy. Dollar whipsaws while stocks tumble as "September effect" takes hold.

9 Sep 2024

Nvidia earnings fail to buoy markets, focus turns to US data

Nvidia slumps in after-hours trading as earnings don't excite. Equities mixed as attention turns to US data for direction. Kiwi outperforms, euro slips on soft German and Spanish CPI figures.

29 Aug 2024

Rate cut euphoria tempered by geopolitics as oil surges

Mood turns cautious amid geopolitical uncertainty in Libya and Gaza. Fears of supply disruptions drive up oil prices, S&P 500 closes lower. China concerns also weigh but European stocks turn positive as data awaited.

27 Aug 2024

Powell signals it's time to cut; dollar sinks but risk rally muted

Powell says the time has come for rate cuts, pushing yields and dollar lower. But cautious rally in stocks as Nvidia earnings, inflation data awaited. Oil jumps amid fresh escalation between Israel and Hezbollah.

26 Aug 2024

Dollar looks at the Fed minutes for a small boost

Dollar weakness dominates the FX space. Today's Fed minutes could halt the euro/dollar rally. Markets are gearing up to the Powell's Jackson Hole speech. Oil prices remain under pressure.

21 Aug 2024

Markets perk up as soft PPI sets the tone ahead of US CPI

Stocks perk up after soft US producer prices, all eyes now on CPI report. Kiwi slumps after RBNZ cuts rates and signals more to come; Pound also slips on weaker-than-expected UK inflation data. Gold holds near record high as dollar skids, ME tensions mount.

14 Aug 2024


Editors' Picks

Regulation Matters: Why a Licensed Forex Broker Should Be Your Top Priority

Choosing a regulated broker is not just a matter of preference; it is a necessity for safeguarding your investments and ensuring that you trade in a fair and secure environment.

Automating Success: The Benefits and Risks of Using Forex Expert Advisors

This article explores the benefits and risks associated with using Forex Expert Advisors, providing insights into how traders can maximize their potential while mitigating potential downsides.

Best Forex Brokers 2024

By prioritizing factors such as overall rating, regulatory compliance, trading conditions and platform reliability traders can make an informed decision that aligns with their trading needs and aspirations, setting the stage for a potentially prosperous trading journey.

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

Best Forex EAs 2024 – Forex Expert Advisors Rating

Expert Advisors (EAs) Rating features high-quality Free and paid Forex EA most popular on the market today.

MultiBank Group information and reviews
MultiBank Group
84%
XM information and reviews
XM
82%
FP Markets information and reviews
FP Markets
81%
FXTM information and reviews
FXTM
80%
AMarkets information and reviews
AMarkets
79%
BlackBull information and reviews
BlackBull
78%

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.