Author: Mr. Amar – Technical Analyst
US dollar currencies rose up to a nearly five-week high this morning during FOMC meeting. This is due to the FOMC Chairman Jerome Powell’s hawkish remarks which triggered a dollar rally and weighed heavily on major global equity indexes. The US DXY Index continues to push higher early Thursday and markets remain bullish ahead of key data releases. The US Bureau of Economic Analysis will publish its first estimate of the fourth-quarter Gross Domestic Product growth, the US Census Bureau will release the Durable Goods Orders figures. Weekly Initial Jobless Claims and Pending Home Sales data will also be featured in the US economic docket.
According to Powell, the Fed concluded a two-day meeting on Wednesday that board members were of a mind to begin hiking in March to tame runaway inflation. In addition to that, there will be no decisions had been taken, but answering a question about whether the central bank would consider a 50-basis point hike. Chairman Powell indicates that the economy seemed stronger than in the most recent hiking cycle. Reflecting the positive impact of Powell’s comments on the policy outlook on the dollar’s performance against its major rivals, the DXY rose more than 0.5% today.
Let’s take an insight into some of the currencies traded against the US dollar, such as EUR/USD. This pair suffered heavy losses on Wednesday and continues to edge lower toward 1.1200 early Thursday. There won’t be any high-tier data releases from the euro area and the dollar’s market valuation is likely to continue to drive the pair’s action. As for GBP/USD, this pair is trading at its lowest level since the beginning of the year and looks to test 1.3400. And for USD/JPY, it gained nearly 100 pips on the back of the hawkish FOMC meeting’s decision this morning.