Forex News for 8th March, 2023
March 8, 2023
- Fed Chair Jerome Powell hinted at a potential 50-bps interest rate hike during his Senate testimony, stating that recent US economic data indicated a need for faster and higher rate increases.
- Powell emphasized that the Fed’s actions will be data-driven over the coming months.
- Powell’s testimony triggered a selloff in stock markets, with the S&P 500 and NASDAQ 100 indices ending the day lower by over 1%.
- Economists and analysts now see a higher US terminal interest rate of approximately 6%, jeopardizing recent rallies in the stock market and strengthening the US Dollar.
- The US Dollar is the strongest major currency in the Forex market, while the Canadian, Australian, New Zealand, and British currencies appear weak.
- US Treasury Yields, particularly the 2-Year, are trading at a new 15-year high above 5% and may continue to rise, creating opportunities for trend traders.
- The US yield curve is more inverted than it has been in 40 years, raising concerns of an impending recession.
- Powell will testify before the House of Congress today, with the release of US JOLTS job data and the ADP non-farm employment change forecast beforehand.
- Some commodities, such as Sugar and Cocoa, are performing well and continuing to rise after significant bullish breakouts.
- The Bank of Canada is expected to maintain its Overnight Rate at 4.50% in its upcoming Rate Statement.