{"id":144100,"date":"2019-03-21T10:30:26","date_gmt":"2019-03-21T14:30:26","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=144100"},"modified":"2019-03-21T10:14:10","modified_gmt":"2019-03-21T14:14:10","slug":"usd-craters-as-fed-confirms-rates-to-remain-on-hold-for-now","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/03\/usd-craters-as-fed-confirms-rates-to-remain-on-hold-for-now\/","title":{"rendered":"USD Craters As Fed Confirms Rates To Remain On Hold For Now"},"content":{"rendered":"
March 21, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Fed Projects NO Rate Hikes This Year<\/strong><\/h2>\n

USD weakness headlined the forex landscape over the European morning on Thursday. The greenback continued to slide following yesterday\u2019s FOMC monetary policy meeting. The meeting saw the\u00a0Fed reaffirming its decision to keep rates on hold<\/strong>\u00a0for now. The bank noted that despite solid labor market conditions, economic\u00a0growth has slowed<\/strong>\u00a0over the first part of the year, reflecting a weaker dollar abroad.<\/p>\n

Hence, FOMC members projected\u00a0no more hikes in 2019<\/a>.<\/strong>\u00a0The Fed also mentioned that\u00a0inflation has declined,<\/strong>\u00a0meaning that the current policy rate is appropriate. Meanwhile, it once again highlighted its wait-and-see approach to incoming data. The USD index has now broken down below the 95.72 February low on the back of the meeting but is trading 0.50% higher in Thursday\u2019s session.<\/p>\n

ECB Economic Bulleting Reaffirms Inflation Issues<\/strong><\/h2>\n

Despite USD weakness, EURUSD retraced this morning. The\u00a0ECB\u2019s economic bulletin<\/strong>\u00a0highlighted the ongoing issues with\u00a0subdued inflation<\/strong>\u00a0and the sizeable\u00a0moderation in growth\u00a0<\/strong>which continues to hamper its goal of 2% inflation. EURUSD is now back below the 1.1400 psychological level following a false break yesterday. The currency pair had reached a 6-week high following a dovish Fed, at $1.1450.<\/p>\n

SNB Cuts Inflation Forecasts<\/strong><\/h2>\n

At its monetary policy meeting today, the\u00a0SNB also kept rates on hold.\u00a0<\/strong>However, it struck a more\u00a0dovish tone<\/strong>\u00a0in its policy statement. The central bank revised its\u00a0inflation forecast lower<\/strong>\u00a0in line with the general tide of dovishness seeping G10 central banks. The SNB noted soft economic data and an overvalued franc as among the issues facing the economy. This led to USDCHF climbing back above the key 0.9926 support. The Swiss franc had been somewhat firm ahead of the announcement, but prices saw a rejection at the 0.9900 barrier.<\/p>\n

GBP Takes Breather After BOE<\/strong><\/h2>\n

GBP remains weak following the BOE\u2019s rates meeting. Despite\u00a0retail sales rising<\/strong>\u00a0more than expected in February, the anticipation of only a short Brexit extension means that the BOE\u2019s\u00a0hands are likely to remain tied<\/a>\u00a0when it comes to rates. With this in mind, the\u00a0BOE did not provide any hawkish signals<\/strong>\u00a0today. However, the acknowledgment of recent strong data sets could see GBPUSD challenging the 1.3150 level resistance again. The British pound is down ~0.50% for the day, uniformly to the US Index gains.<\/p>

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Safe-Haven Gold and Yen Rise<\/strong><\/h2>\n

The sell-off in USD today has been\u00a0good news for\u00a0<\/strong>safe haven\u00a0assets<\/strong>\u00a0with both gold and the Japanese Yen benefiting. Gold has traded near highs of 1320.08 today, as it heads back towards last week\u2019s highs. Meanwhile, USDJPY has broken below the 110.75 support. Although JPY upside had been capped by the bearish bias left over from last week\u2019s\u00a0BOJ<\/strong>\u00a0meeting where the bank reaffirmed\u00a0its commitment to negative rates,<\/strong>\u00a0Yen bulls are having another go at pushing prices lower. USDJPY rejected the 110.36 support, however, new positions weigh down on the exchange rate.<\/p>\n

Equities Under pressure Amidst Google Fine and Boeing Investigation<\/strong><\/h2>\n

Despite the sell-off in the US Dollar, equities have come under pressure over the last 24 hours with the SPX500 trading back under the 2818.07 level. In Europe,\u00a0GER30 is down over the last 24 hours<\/strong>\u00a0also, falling below the 11697.1 level. This comes as the market responds to news that European regulators have hit\u00a0Google<\/strong>\u00a0with a 1.5 billion EUR fine regarding abuses related to its dominant position in online search advertising. News of the fine along with reports of the investigation into\u00a0Boeing<\/strong>\u00a0airline inventory has taken a\u00a0toll on risk appetite<\/strong>\u00a0heading into the end of the week.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Fed Projects NO Rate Hikes This Year USD weakness headlined the forex landscape over the European morning on Thursday. The greenback continued to slide following yesterday\u2019s FOMC monetary policy meeting. The meeting saw the\u00a0Fed reaffirming its decision to keep rates on hold\u00a0for now. The bank noted that despite solid labor market conditions, economic\u00a0growth […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-144100","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=144100"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144100\/revisions"}],"predecessor-version":[{"id":144102,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144100\/revisions\/144102"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=144100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=144100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=144100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}