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Indecision continues to be a defining feature of the yen's recent price action. This can be seen in USD/JPY, which has posted average fluctuations of just 0.4% over the last three trading sessions, failing to establish a clear direction and reinforcing an increasingly evident neutral bias.
Recent trading sessions have started to become challenging for the stability of the Japanese yen’s strength, as USD/JPY has now posted a three-session bullish streak, with a gain of around 0.8% in the short term.
Over the past five trading sessions, EUR/USD price action has shown a consistent bearish bias, accumulating a short-term decline of close to 1%. One of the main drivers behind this growing weakness has been central bank dynamics, particularly in the United States, where new guidance could emerge following the release of key employment data scheduled for this week.
Gold closed the week with four consecutive bullish sessions and a gain of more than 2%, as buying pressure attempts to consolidate once again in the market. For now, buying strength has begun to improve following this week’s Federal Reserve decision and the recent pullback in market confidence, allowing gold—as a safe-haven asset—to recover ground in the short term.
The US dollar was broadly higher overnight as the Fed’s Bullard laid out a path for 50-bos hikes at each remaining Fed meeting this year.
What began as ‘just another ripper inflation print’ quickly turned into panic of an emergency hike from the Fed. But just how realistic is that?
Discover what the Federal Reserve is, how it operates, and the way its policies can influence markets.
Overall, the BEA estimated that the US economy grew at a 3.2% annualized rate in Q1, well above expectations of 2.2% growth. While President Trump will no doubt extol the headline growth, the details are less impressive under the hood.
See a summary of the top themes and trends from today's US session!
As we noted in yesterday’s FOMC Preview report, the US central bank was never going to make any immediate changes to policy, leaving traders to read Powell and Company’s tea leaves for implications about future tweaks. As it turns out, the tea leaves were clear: The Fed has undergone a major dovish shift.
Spoiler alert: The Federal Reserve won’t be making any immediate changes to monetary policy at the conclusion to this week’s two-day meeting. Nonetheless, it would be a mistake for traders to ignore the central bank’s economic projections and comments.
With seemingly every member of the Federal Reserve emphasizing that the central bank would be “patient” following its December interest rate hike, it came as no surprise that the Fed left interest rates unchanged today. And, despite the speculation that Chairman Powell and Company could revisit their balance sheet rundown strategy, the central bank was quiet on that front as well.
For seemingly the first time in months, today’s US jobs report had at least a little potential to influence the imminent Federal Reserve interest rate decision.
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