Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The American dollar ended the day lower after the US Federal Reserve monetary policy decision. The US central bank hiked rates by 25 bps, as expected, with Bullard being the only dissenter voting for a 50 bps hike.
Economic Data
Canadian inflation hit 5.7% YoY in February, according to Statistics Canada’s latest headline Consumer Price Index (CPI) release on Wednesday. That was above the expected rise to 5.5% from 5.1% in January. The MoM increase in the headline CPI in February was 1.0%, a little above the 0.9% expected and above January’s 0.9% reading.
Retail Sales in the US rose by 0.3% on a monthly basis in February to $658.1 billion, the data published by the US Census Bureau showed on Wednesday. This reading fell short of the market expectation for an increase of 0.4%. On a positive note, January’s print got revised higher to 4.9% from 3.8%.
Other Developments
The dot-plot now indicates six rate hikes for the year, while Fed officials see the Fed Funds rate at a median of 1.9% at the end of this year and 2.8% at the end of 2024.
Stocks initially fell with the announcement but quickly recovered as chief Jerome Powell sounded optimistic about the economic progress and convinced market participants that the central bank is in control of the situation.
Meanwhile, there has been no real progress in Ukrainian and Russian peace talks. Moscow said they made “significant progress” towards a 15-point peace plan that would include a ceasefire and Russian withdrawal from Ukraine if Kyiv declares neutrality and accepts limits on its military forces.
However, Kyiv rejected the proposed neutrality. Also, the International Court of Justice in The Hague ordered Russia to suspend the invasion of Ukraine.
Financial markets remained optimistic, with most global indexes closing in the green. All of the US indexes closed with gains, with the Nasdaq Composite being the best performer by adding over 3%.
US government bond yields continued to pressure the upside. The yield on the 10-year Treasury note peaked at 2.246% to later settle at 2.16%.
The EUR/USD pair reached fresh weekly highs in the 1.1040 price zone, while GBP/USD extended its recovery to 1.3155. Meanwhile, the AUD/USD pair flirts with 0.7300 while USD/CAD plunged to 1.2690.
The USD/JPY pair hit a fresh multi-year high of 119.11 before retreating towards the current 118.60 price zone.
Gold posted a nice comeback after dipping to $1,895 a troy ounce, now trading at around $1,929.40. Crude oil prices, on the other hand, remained under pressure, and WTI settled just below $95 a barrel.
