What to watch for on Wednesday, September 28:
Dollar purchases came to a halt early on Tuesday, but resumed following better-than-expected US data releases, also helped by poor Wall Street results. Furthermore, fears of a global recession continue to drive market sentiment.
During the European morning, the president of Bank Central European, Christine Lagarde, and the President of the US Federal Reserve, Jerome Powell, attended an event on the opportunities and challenges of the tokenization of finance. There were hardly any references to monetary policy and they went unnoticed. Both are scheduled to participate in different events on Wednesday, none directly related to monetary policy.
The functionaries of the US Federal Reserve tried to pour cold water on the recent strength of the dollar. The Fed’s Charles Evans said he was concerned about going too far, too fast with rate hikes, but added his outlook is in line with the Fed’s median rate assessment of 4.25-4.50% at the end of 2022 and at 4.6% at the end of next year. Neel Kashkari said the central bank is moving “very aggressively” and there is a high risk of “overdoing it”. Finally, James Bullard pointed out that inflation is a “serious” problem in the US.
US government bond yields started the day retreating from multi-year highs, rebounding after the US open. Aggressive comments from US policymakers on Monday led yields hit multi-year highs, and the 10-year Treasury note yield widened to 3.99% on Tuesday. The 2-year Treasury bond yield is currently trading at 4.30%, slightly below its previous close.
The EUR/USD pair ended the day just below the 0.9600 mark, trading not far from the multi-year low of 0.9549. The worsening of the energy crisis in the EU adds pressure, since earlier in the day several leaks were detected in the Nord Stream gas pipelines, which interrupted the transport of gas from Russia to the EU.
The GBP/USD pair stabilized around 1.0700. Bank of England Chief Economist Huw Pill said “monetary policy normalization is not a race between countries and markets are sometimes uncomfortable with that,” adding that it is hard not to draw the conclusion that they will need a significant monetary policy response.
AUD/USD ended the day at the 0.6420 price zone, while USD/CAD settled at 1.3725. The dollar advanced against haven currencies, with USD/CHF trading around 0.9920 and USD/JPY at 144.85.
Gold fell and is trading just below $1,630 a troy ounce. Crude Oil prices rose, with WTI now trading at $78.50 a barrel.
Shiba Inu Price Prediction: How Many Burned SHIB Tokens Will It Take to Trigger a Bull Run?
Do you like this article? Help us with some comments by answering this survey:
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
