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19 Mar 2015
What's next: Dollar weakness proved short-lived; back to pre-Fed levels
FXStreet (Tokyo) - No matter how many pips the US Dollar lost after the Federal Reserve removed the world "patient;" the USD recovered it today. 430 pips versus the Euro; 450 pips against the British Pound; and 175 pips versus the Japanese Yen.
Being patient despite the Fed exhausted the patience
Investors digested Fed's decision and assumed a more soft hiking rate process, but a rise at all. Maybe no in April, neither in June, perhaps in September. As FXStreet Chief Analyst Valeria Bednarik commented in a recent report, "the fact remains to be that the US is the only of the major economies, in the path of tightening its economic policy."
Overall, the EUR/USD is back to 1.0615 after declining from yesterday's highs of 1.1040; the GBP/USD is trading at 1.4710 after falling over 450 pips from 1.5165; while the USD/JPY recovered from the 119.50 area and currently it's testing the 121.00 resistance.
Oil advances for the second day and now it's pricing at $45.55; while gold is extending gains after yesterday's rally and not it's testing the 1,175 area. US stocks are mixed.
Major headlines in the day:
- SNB keeps interest rates unchanged, says CHF is overvalued
- QE easing financial conditions – ECB bulletin
- US Initial Jobless Claims print at 291K, Current Account Deficit rose
What's next on Friday?
Investors should pay attention to the RBA governor Stevens speech at 2 GMT. Then a relatively empty economic calendar in Europe before the publication of the inflation and the retail sales reports in Canada.
After the USD's recovery on Thursday, investors could expect some consolidation on Friday with the bets going on short covering and profit taking ahead of the week. The parity in the EUR/USD is too far yet, and a big catalyst like the Grexit should be needed but it's highly improbable.
No matter we are beyond of the 15th, be aware of the Ides of March.
Being patient despite the Fed exhausted the patience
Investors digested Fed's decision and assumed a more soft hiking rate process, but a rise at all. Maybe no in April, neither in June, perhaps in September. As FXStreet Chief Analyst Valeria Bednarik commented in a recent report, "the fact remains to be that the US is the only of the major economies, in the path of tightening its economic policy."
Overall, the EUR/USD is back to 1.0615 after declining from yesterday's highs of 1.1040; the GBP/USD is trading at 1.4710 after falling over 450 pips from 1.5165; while the USD/JPY recovered from the 119.50 area and currently it's testing the 121.00 resistance.
Oil advances for the second day and now it's pricing at $45.55; while gold is extending gains after yesterday's rally and not it's testing the 1,175 area. US stocks are mixed.
Major headlines in the day:
- SNB keeps interest rates unchanged, says CHF is overvalued
- QE easing financial conditions – ECB bulletin
- US Initial Jobless Claims print at 291K, Current Account Deficit rose
What's next on Friday?
Investors should pay attention to the RBA governor Stevens speech at 2 GMT. Then a relatively empty economic calendar in Europe before the publication of the inflation and the retail sales reports in Canada.
After the USD's recovery on Thursday, investors could expect some consolidation on Friday with the bets going on short covering and profit taking ahead of the week. The parity in the EUR/USD is too far yet, and a big catalyst like the Grexit should be needed but it's highly improbable.
No matter we are beyond of the 15th, be aware of the Ides of March.