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30 Mar 2015
What's next? Dollar retakes its rate beliefs; USDJPY jumps 100 pips
FXStreet (Tokyo) - The US Dollar rallied on Monday against its major competitors as investors welcomed Janeth Yellen remarks on interest rates. The USD/JPY and USD/CAD, both rose 100 pips in the day.
Federal Reserve leader Janeth Yellen acknowledged that a rate hike is more than likely in 2015. "I expect that conditions may warrant an increase in the federal funds rate target sometime this year," Yellen said. However, she was very careful explaining that it won't mean that the fed will move further on hikes. They will be patient about the pace of further FOMC moves.
It made happy everybody in the US. USD buyers and stocks market. The EUR/USD declined around 80 pips to trade close to 1.0800; and the GBP/USD fell to test the 1.4750 before bouncing to trade above 1.4800.
The USD/JPY and the USD/CAD jumped 100 pips to 120.20, and 1.2700 respectively; while the AUD/USD declined around 130 pips in the day to 0.7630. Oil tested the 47.60 area to the downside, and gold fell for the second day to 1,182/oz.
What happened?
- European Monetary Union Consumer Confidence meets forecasts (-3.7) in March
- Personal income in the US rose 0.4% in February
- United States Pending Home Sales (MoM) came in at 3.1%, above expectations (0.4%) in February
What's next on Tuesday?
A bunch of economic data on Tuesday. Investors should pay attention to the ANZ business Confidence in New Zealand; Unemployment rate in Germany; the UK GDP; and the US consumer confidence data. Keep an eye on Fed speakers: Lacker, Mester and George.
Another topic that market players may want to keep in mind is the month-end rebalancing. Well not only month-end but also quarter-end. According to Forex.com analyst Matt Weller, "US markets lagged their European counterparts, meaning that global portfolio managers will have to sell European investments and buy US assets to rebalance back to their target allocations. This means that we could see some demand for the US dollar ahead of the European close tomorrow."
Federal Reserve leader Janeth Yellen acknowledged that a rate hike is more than likely in 2015. "I expect that conditions may warrant an increase in the federal funds rate target sometime this year," Yellen said. However, she was very careful explaining that it won't mean that the fed will move further on hikes. They will be patient about the pace of further FOMC moves.
It made happy everybody in the US. USD buyers and stocks market. The EUR/USD declined around 80 pips to trade close to 1.0800; and the GBP/USD fell to test the 1.4750 before bouncing to trade above 1.4800.
The USD/JPY and the USD/CAD jumped 100 pips to 120.20, and 1.2700 respectively; while the AUD/USD declined around 130 pips in the day to 0.7630. Oil tested the 47.60 area to the downside, and gold fell for the second day to 1,182/oz.
What happened?
- European Monetary Union Consumer Confidence meets forecasts (-3.7) in March
- Personal income in the US rose 0.4% in February
- United States Pending Home Sales (MoM) came in at 3.1%, above expectations (0.4%) in February
What's next on Tuesday?
A bunch of economic data on Tuesday. Investors should pay attention to the ANZ business Confidence in New Zealand; Unemployment rate in Germany; the UK GDP; and the US consumer confidence data. Keep an eye on Fed speakers: Lacker, Mester and George.
Another topic that market players may want to keep in mind is the month-end rebalancing. Well not only month-end but also quarter-end. According to Forex.com analyst Matt Weller, "US markets lagged their European counterparts, meaning that global portfolio managers will have to sell European investments and buy US assets to rebalance back to their target allocations. This means that we could see some demand for the US dollar ahead of the European close tomorrow."