Forex News for 8th March, 2023

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March 8, 2023

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• In his testimony before the US Senate, US Federal Reserve Chairman Jerome Powell demonstrated a more hawkish position on monetary policy, raising the possibility of quicker and steeper interest rate increases.
• While recent US economic indicators suggest that the economy has not yet sufficiently slowed down, Powell emphasised that the present pace of raises has not been sufficient to reduce inflation.
• Powell’s remarks caused a major market response, leading to fresh highs for the US dollar and 2-Year Treasury Yield of three months and fifteen years, respectively. Stock markets experienced a selloff as a result, with the S&P 500 Index and the NASDAQ 100 Index both finishing the day lower by more than 1%.
• Since economists and analysts now anticipate a higher US terminal interest rate of roughly 6%, up from the previous consensus of 5.6%, recent stock market gains may be in jeopardy.
• Other major currencies like the Canadian, Australian, New Zealand, and British Pound are currently weaker than the US Dollar on the Forex market.
• Trend traders who can access this asset will have opportunities due to the predicted continuation of the climb in US Treasury Yields, notably the 2-Year.
• More inverted than at any time in the previous 40 years, the US yield curve is currently increasing fears about the possibility of an oncoming American recession.
• Today’s US JOLTS job data and the ADP non-farm employment change prediction will both be eagerly followed as Powell is scheduled to speak before the House of Congress.
• Some commodities, such as sugar and cocoa, are still doing well and exhibiting notable bullish breakouts.
• In its forthcoming Rate Announcement, the Bank of Canada is anticipated to maintain its Overnight Rate at 4.50%.