Forex news for March 15, 2017
Fed:
- Fed hikes rates to range of 0.75%-1.00%, as expected
- FOMC Statement from the Federal Reserve Bank for March 2017
- See the comparison of this FOMC statement with the previous one
- FOMC Dot Plot shows 3 total hikes in 2017
- Yellen opening statement: Hikes doesn't reflect reassessment on economic outlook
- Yellen Q&A: The simple message is the economy is doing well
- Yellen Q&A: We don't need to evaluate fiscal policy until it's in place
- Yellen Q&A: Portfolio discussed, no decisions yet
Dutch election:
- Dutch exit poll: Liberal party may get 31 seats. Freedom party 19 seats
- Second Dutch exit poll looks a lot like the first
More news
- February 2017 US CPI 2.7% vs 2.7% exp y/y
- US February advance retail sales +0.1% vs +0.1% expected
- Gundlach expects US dollar to move sideways
- Atlanta Fed GDPNow Q1 forecast falls below 1%
- Trump and Saudi Prince discussed new investments worth more than $200B - White House
- US weekly oil inventories -237K vs +3133K expected
- US January business inventories +0.3% m/m vs +0.3% expected
- March 2017 US NAHB housing market index 71 vs 65 exp
- February 2017 Canadian existing home sales 5.2% vs -1.3% prior m/m
Markets:
- Gold up $21 to $1219
- S&P 500 up 20 points to 2385
- WTI crude up $1.29 to $49.00
- US 10-year yields up 10 bps to 2.50%
- AUD leads, USD lags badly
It was a dovish hike. The market has been aggressively pricing in 3 or 4 Fed hikes this year but Yellen was her usual self and decided to wait-and-see what the economic data looks like before making any kind of commitment.
Dollar bulls had started to worry in the hours leading up to the announcement. It's a crowded trade and there were signs of people selling dollars and heading to the exits since the start of US trading.
But it was nothing compared to the instant 50-70 pip moves on the announcement. Those consolidated before the statement and then extended when Yellen reiterated that there was no urgency or certainty on future cuts. That was underscored by no real changes in the dots or forecasts.
We finish the day with the dollar at least 100 pips down across the board. The commodity currencies are doing especially well as risk appetite improves and commodity prices rise. USD/CAD is down more than 140 pips from the pre-FOMC levels and AUD/USD has erased all the March selling.
One underreported story was a comment from the US's Navarro that hinted that Trump's strategy could be shifting to forming some kind of bloc with Canada and Mexico to take on the rest of the world. We'll follow up on that in the day ahead.
Keep an eye on the antipodeans with NZ GDP and Aussie jobs up later.
Late in the day, the first Dutch exit polls showed Wilders stumbling and that gave the euro a lift to a fresh high of 1.0740. That's the best since Feb 6.
