FX Brief: USD dumps on Powell; BOC eyed

A summary of news and snapshot of moves ahead of the US session.

  • USD slumped after Fed Chairman Powell's prepared remarks ahead of his testimony seem to suggest a rate cut later this month is a "done deal," with 2-year yields dropping 7bps in the 5 minutes since the release. Powell said that in the June FOMC meeting many of his colleagues saw the case for somewhat easier policy and that uncertainties since have continued to rise.
  • FOMC meeting minutes will be released later, ahead of US CPI on Thursday. So, the dollar will remain in focus for the next 24 hours or so.
  • Stocks rebounded sharply after the dovish Powell remarks hit the wires, while gold and silver also jumped. Crude oil was higher ahead of EIA oil inventories data, supported further by a weaker US dollar.
  • Up next is the BOC rate decision. The BOC is expected to hold rates but, given their strong economic data in recent weeks then be on guard for a slightly hawkish undertone. CAD crosses are clearly the ones to watch as we head into the North American session.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account