FXPrimus’s Daily Market Analysis is provided by the in-house FX Market Specialist, Stavros Tousios.

Powell Not Concerned about Yield Curve, Dollar Moves Higher

US Fed Chair Jerome Powell’s testimony was cautious and pragmatic yesterday, supporting the Fed’s gradual tightening policy and taking the US Dollar 0.5% higher, while the US yield curve provides no signs of recession just yet.

EU and Japan signed a long-waited “win-win” free trade deal yesterday that covers nearly a third of the world’s GDP, underlining contrary actions taken by US President Trump on tariffs and his earlier withdrawal from the Trans-Pacific trade agreement 18 months ago.

In UK, Carney said a “no-deal” Brexit is going to harm Europe, yet the EU did not seem particularly concerned about the comments. The political cloud ran the currency down on Tuesday.

Following the said developments, USD risk sentiment rose, leading the rest of the markets lower against the greenback, which may also be the case today.

Today’s Important Indicators

Major Market Updates

• EUR/USD – Eurodollar breaks below $1.17 as US risk sentiment leads markets lower. Investors wait for Consumer Inflation data while the exchange price floats above golden $1.1623 level.
• GBP/USD – Cable falls to $1.30 following a 6-month wage growth low. Pound was the worst performer intraday as the chances for a hike remain unchanged. Investors eye UK’s CPI.
• USD/JPY – Dollar-Yen heads towards 113 as Powell’s testimony supports Dollar. The pair broke its previous high after a short-lived pullback at 112.27 retest. Rerun of semi-annual testimony due today.
• USOIL – Crude Oil falls for another session following API report as both Crude and Gas inventories rise to 3.622M and 44K barrels. Price a tad lower but below golden $67.31/b. Focus on EIA report.
• XAU/USD –Gold prices reach 1-Year low as Fed’s testimony stays the course to gradual rates, break below weekly ascending trendline worrying if proven validated. Weekly RSI nearly oversold.
• BTC/USD – Bitcoin soars $1000 in an hour after $20B injection in the market, price rejected at $7.5K. Optimistic regulatory developments may support a further spike towards $8K, and then $10K.
• US Equities – Tesla jumped 4.06% higher, Netflix plummeted by 5.24%
• US Indexes – DJ and S&P 500 appreciated by 0.22% and 0.40%, respectively.
• European Indexes – UK 100 rose by 0.41%, DE 30 closed 0.57% higher.
• Asian Indexes – ASX 200 upsurged by 0.65%, Nikkei improved by 0.43% and Hang Seng trades 0.22% lower.