Forex news and trading headlines 18 March 2015
The FOMC
- US FOMC drops patience in monetary policy statement
- FOMC central tendencies and rate projections from the March 2015 meeting
- Full FOMC statement for March 2015
- Dollar drops as patience comes out of FOMC statement with strings attached
- Yellen: FOMC doesn't want to rule out raising rates at subsequent meetings
- Strong dollar is pushing inflation down says Yellen
- Yellen: US economy at zero lower bound on rates creates asymmetric risks
- Yellen says stocks are on the high side
- Yellen: No decisions made on timing of halting re-investments and rollovers
- Fed expects exports to drag on outlook on strong dollar says Yellen
- The USD tumbles against all major currencies
- Is it all over for rate hikes as the Fed turns tail on the economy?
- Dollar falls into a hole as cable and euro jump over 200 pips
The data
- January 2015 Canadian wholesale sales -3.1% vs -0.8% exp
- US EIA petroleum status report - Crude stocks +9.622m vs +3.8m exp
The news
- Greek PM Tsipras says negotiation doesn't end with Feb 20 agreement
- German GDP to grow at 1.5% in 2015 says finance ministry
- Germany's Schaeuble says Greek problems are not to do with debt restructuring obligations
- Germany's Gabriel says euro weakness shouldn't lead to laziness
- ECB ran model on Greek exit - Manager Magazine
- Tsipras and Merkel to have dinner March 23rd - Livesquawk
- Alpari administrators calling in debt collection agency to collect on negative balances
- The biggest risk to stability stems from liquidity says BOE's Cunliffe
- UK Budget: Osborne says Britain is walking tall again
- UK Budget - Osborne says govt will meet original debt target set out in 2010
- Osborne cutting tax to boost oil industry
The market got what it wanted from the Fed, and then copped a load of what it didn't want. Patience was finally taken out but it's the baggage that came with it that moved markets. Growth forecasts were cut, inflation was lowered, and even the jobs market was told it needed to do more as the Fed finally woke up to the fact that cracks in the economy were showing through the paper. The switch between the bullish and hawkishness of the Jan statement was almost completely reversed in this statement. The keyword may have gone but the guidance has just been moved from one hand to the other. Now after years of QE, tapering and word games the Fed is just going to call rates on the data, as it bloody well should have been doing in the first place.
USD/JPY got knocked down as the headlines tumbled out. From a slow slide all day to 120.80 we rode back to 121 just before the announcement. Then the hit came and we sunk to 120.30. Then we chewed over the details as we waited for Yellen to take her seat. Not a lot happened over that period and we looked like the damage wasn't going to be that great, even as we dropped to 120.00. It was all over bar the shouting until US stocks closed and the poop hit the fan. In a flash we were at 119.30 as the buck went bananas. Since the fallout we've returned back to 120.20
EUR/USD waltzed up to 1.0735 from 1.0600 over the FOMC then carried on to 1.0830 before the rocket took off to 1.1043 in a flash. Just as quick we dropped back 120 pips then as the dust settled fell back to 1.0850
GBP/USD went the same way. 1.4700 - 1.4900 on the FOMC, then to 1.5166, to 1.5030, to 1.4950. Perhaps there was a bit more pent up aggression in the quid after the recent sharp falls
Everything that had /USD attached to it painted a similar pattern. USD/CHF has had a 400+ range from 1.0040 to 0.9625. The aussie grabbed over 200 pips from 0.7640 to 0.7842
All sorts of fingers will be pointed at the move, from fat ones to algo's but it looks to be a good old fashioned, toys out the pram blow out taper stylee. Stops got smashed all over the place and maybe a large long dollar position has hit the exit doors. At the end of the day the Fed hasn't ruled out rate hikes, nor signaled that they are pushing them back further than a lot of the market expects anyway, so when things settle down we'll get a clearer picture of what the market wants to do
Until then, stay safe and be prepared for the possibility of a bit of chop tomorrow
Thank you all for flying with ForexLive
