This was the lowest reading in the current economic cycle and the lowest since 1973 which maintained confidence in a very firm labour market and expectations that the Federal Reserve would move to tighten policy in the short term.
Fed Governor Powell maintained an optimistic tone on the outlook and stated that the Fed was very close to meeting its 2% target while a rate increase is on the table for discussion at the March FOMC meeting.
Increased expectations of a March Fed tightening continued to support the dollar, although the Euro did find some support on approach to the 1.0500 level as markets had already moved closer to pricing in a US rate hike with futures markets indicating over a 75% chance of a move.
The Euro found some support at the 1.0500 area without making any significant headway as markets waited for comments from Fed Chair Yellen and Vice-Chair Fischer after the European close on Friday.
Onto June A slew of strong US economic data over recent weeks had boosted expectations for how the culmination of the Fed’s two-day meeting would be presented to the public last night. The story goes back further. The narrative dominant in late-2023 of a US economy in need of restrictive monetary policy was unavoidable. The […]
Germany and the EU The Germany Supply Chain Act came into force in 2023 as a result of Germans wanting to do something good for employees in other countries in particular with respect to human rights and environmental issues. So far so good. But a combination of cost and bureaucracy overlaid with the difficulty of […]
Emergency Stop In the early hours of trading on Monday morning, sudden and significant buying pressure within USDJPY has markets wondering: is this the signal that local authorities are taking another stab at active market intervention? In a critical week for FX, with central bank decisions and a slew of top-level economic data from across […]