Daily market commentary: The USD loses momentum after the latest US Fed policy decision announcement


The US dollar lost some momentum after the latest US Federal Reserve policy decision announcement on Wednesday, retreating from levels close to multi-year highs. As was widely assumed the FOMC went ahead with a half-percentage point rate hike, but somehow fell short of many investors’ expectations. After shifting to a more hawkish stance at the end of last year, the US central bank created high expectations amongst investors, to the point that yesterday’s announcement of the largest rate hike in 20 years ended up disappointing those that hoped for the tone in which it was communicated to be more assertive. By dismissing the possibility of any 75 basis points moves, Jerome Powell failed to live up to the expectations of dollar bulls and, consequently, the greenback lost some steam.

Ricardo Evangelista – Senior Analyst, ActivTrades

Daily Market Commentary

European Shares

European stocks traded all in green territory on Thursday, extending gains registered at the end of the US session, after investors welcomed the Fed’s action to tame inflation. FED Chairman Jerome Powell managed to reassure investors by announcing a 50-basis point rate hike while rolling-out the prospect of further increases at forthcoming meetings, sparking a rally in Stocks and Treasuries. However, the optimistic mood may be tempered soon as most investors keep in mind the continuing war in Ukraine as well as supply chain disruptions caused by virus lockdowns in China, which will make the economic outlook complicated and uncertain in the long run, especially at a time when central banks are withdrawing liquidity. Meanwhile, investors will be looking at the other side of the Atlantic as a decision on rates and balance sheet reduction from the BoE is due today, right before the US Jobless Claims data release. The best performance comes from Paris as the CAC-40 index trades above the 6,500pts mark, with the 6,600pts resistance now in sight.

Pierre Veyret– Technical analyst, ActivTrades

Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.


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