All Articles Tagged - Fed

Fed slightly more cautious as it keeps rates on hold

Posted on January 27, 2016 at 8:20 pm GMT

The Federal Open Market Committee concluded its two-day policy meeting today and kept interest rates unchanged as expected at its first policy decision of the year. In December, the FOMC decided to raise the federal funds rate for the first time since 2006, increasing it by 25bps to a range of 0.25-0.50%. A tightening labor market and a sustained economic recovery since the financial crisis had prompted the Fed to start the normalization of interest rates even as inflation remains [..]

European Session – Weak dollar ahead of FOMC, euro hits 1 year high versus Swiss Franc

Posted on January 27, 2016 at 3:30 pm GMT

The market’s attention was on the Federal Reserve today and the release of the Federal Open Market Committee (FOMC) statement after a policy meeting that began on Tuesday. In anticipation of the policy announcement, there was little risk off in the currency markets as there are expectations of a somewhat more dovish tone from the Fed today as it takes into account the turbulence in global markets since the start of the year. Such economic conditions would not give the [..]

European Session – Loonie bounces along with oil prices, sterling rallies

Posted on January 26, 2016 at 3:48 pm GMT

Risk sentiment turned in the European session, leading to a recovery in equity markets and a bounce in risk assets. Oil prices bounced back above the key $30 a barrel level, mainly due to hopes that a deal may be edging closer for OPEC and non-OPEC producers to cut the output of oil. This optimism came about after Iraqi Oil Minister Adel Abdel Mahdi said he saw “some flexibility” for a deal, suggesting that Saudi Arabia and Russia could be [..]

Attention turns to Fed and BoJ meetings amid market volatility and oil rout

Posted on January 26, 2016 at 11:44 am GMT

Two major central banks will hold their policy meeting this week, with the US Federal Reserve and Bank of Japan meeting for the first time in 2016. While the Fed is almost certain to keep rates steady on Wednesday, there’s been increased speculation in recent days that the BoJ might surprise with policy easing on Friday. The renewed slide in oil prices since the start of the year has brought back the threat of deflation. Crude oil prices were back [..]

Oil rout intensifies as Iran re-enters global oil market

Posted on January 18, 2016 at 11:40 am GMT

Oil prices extended their slide on Monday after the international community decided to lift sanctions on Iran over the weekend. The decision to ease sanctions against Iran comes after the International Atomic Energy Agency said in its report that Iran has fulfilled its obligations under last year’s nuclear accord that prohibits Iran from developing nuclear weapons. Analysts estimate that Iran will be able to raise production by 500,000 barrels a day immediately after the suspension of sanctions. This would add [..]

European Session – Pound falls on weak data but dollar firmer; Oil sees brief rebound

Posted on January 12, 2016 at 3:38 pm GMT

European equities rose sharply on Tuesday as risk sentiment returned in early European session. A firmer yuan and gains in China’s main indices helped restore some confidence in the markets. The US dollar reversed earlier losses to head higher and oil prices attempted to make the first daily gain in 2016. Comments by several central bank officials appeared to have little impact as market attention was focused on developments in China and in crude oil prices. On Monday, Dallas Fed [..]

Forex Markets 2015/16: Annual Review & Outlook

Posted on December 24, 2015 at 9:41 am GMT

By all accounts, 2015 was the year of the dollar as the greenback surged against its major counterparts. The dollar was up around 10% versus a basket of trade-weighted currencies, with some of its strongest gains registered versus commodity currencies such as the Canadian dollar and the Australian dollar, while it also gained around 10% versus the euro on policy divergence. Interestingly, the dollar’s gains were not evenly distributed throughout the year as the dollar index surged to a fresh [..]

Better-than-expected US GDP revision fails to lift dollar

Posted on December 22, 2015 at 3:17 pm GMT

US economic growth was revised slightly lower in the final estimate of third quarter GDP growth. The economy expanded by an annualized rate of 2.0% in the third quarter of the year against second estimates of 2.1% growth. The figure is ahead of forecasts of 1.9% expansion. The downward revision was primarily due to private inventory investment being revised lower. The third quarter growth is almost half the rate of that seen in the second quarter when the economy grew [..]

US Dollar: Buy on the rumor, sell or buy more on the fact?

Posted on December 18, 2015 at 2:55 pm GMT

The announcement of the Fed’s rate hike on December 16 was a very well anticipated event, as economists and analysts were almost unanimous in awaiting such a development. The market was not entirely convinced however, as even on the eve of the rate hike, futures’ markets gave around a 20% probability that the Fed would keep rates on hold. Therefore, the news that the Fed had hiked should not have come as a surprise to market observers and one would [..]

European Session – Euro under pressure against dollar on policy divergence

Posted on December 17, 2015 at 3:25 pm GMT

The euro remained under pressure against the broadly firmer dollar given policy divergence between the ECB and the Fed. After the Fed lifted rates yesterday, the euro weakened and extended losses in Asia, then consolidated in European trading. European data this morning showed a disappointing German IFO survey, with the business climate indicator falling slightly to 108.7 in December from a prior 109. But the market focus was on the Fed message so price action for the euro versus the [..]

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