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.
Japanese Yen With JPY at a new 34 year low versus EUR, the market is set for an ambush by the Bank of Japan if it acts today at the end of their Policy Meeting to support the Yen. The reason that the market is susceptible is because it has convinced itself that the BoJ […]
Too soon to call USD lower Those following the US Dollar’s performance in the markets would have noted a recent downturn accelerating as this week has progressed. There have been two factors driving this sell-off but it is far from certain that either may endure long enough to push the Dollar index back to its […]
Milan, Italy The City of Milan has a late night noise problem and so it has acted unilaterally to resolve it-Italian style. A ban on the sale of take away food including ice cream and pizza after midnight is being imposed to protect the “peace and health of residents.” Here in the UK late night […]