2022-11-22 • Updated
The US Federal Reserve may refrain from more aggressive interest rate hikes in March due to geopolitical risks after Russia's special operation in Ukraine.
Fed officials, who would still like to begin the process of cutting easy monetary policies caused by COVID-19, say they are monitoring every impact of the conflict on the US economic activity. Since the pandemic started, the central bank has kept its interest rate near zero, so now high inflation in the US has implied that the Fed is likely to normalize it quicker. Earlier in August, St. Louis Fed President Jim Bullard declared that he would support a double rate hike (0.50%) for the next Fed meeting in mid-March. In fact, the Fed has not raised interest rates by more than 0.25% since 2000.
However, economists say the progressing situation in Ukraine brings plenty of doubts in a global recovery the same as the coronavirus issue. Disruptions in Russian oil and gas supplies are pushing up energy prices, and Ukraine's struggling economy is already impacting outcomes and growth across the continent.
In addition, the US Dollar Index can be impacted in any case, whether it’s a coronavirus issue or Ukrainian conflict. The US Dollar Index (USDX) is a measure of the US dollar value against a basket of currencies from most of the US's most important trading partners.
Since November 2021 this index has been fluctuating a lot, the lowest level was 94,540, the highest was 97,465. Most likely, it will continue to move up and down.
Now the resistance level is on 97.750, the support is on 96.500.
Some releases influence US Index and USD a lot, which can provoke unexpected fluctuations. There are several of them:
Still, the inflation rate in the US is 7.5%, which is the highest in 40 years. If the Fed slows down the interest rate rise, it can lead to consequences which are difficult to correct.
During the Asian session on Wednesday, the USD/CAD pair rebounded after two days of losses, reaching around 1.3590. This uptick is fueled by a stronger US dollar and lower crude oil prices, which put pressure on the Canadian dollar. The decline in Western Texas Intermediate (WTI) oil prices to approximately $80.70 is attributed to...
The Australian Dollar (AUD) rebounds on Monday, despite a slight dip in the US Dollar (USD) and higher US Treasury yields. Investors are eyeing Australian monthly Consumer Price Index (CPI) data for February and US Gross Domestic Product (GDP) for Q4 2023. The AUD gains momentum as the ASX 200 Index rises, especially in mining and energy sectors. Additionally, the Aussie...
Gold prices rose on Monday as the US Dollar weakened amidst speculation about potential Federal Reserve rate cuts starting in June. This weakened Dollar was partly due to improved risk sentiment pushing US Treasury yields lower. Despite facing challenges from declining yields, gold prices recovered to nearly $2,170 per troy ounce, driven by the Dollar's weakness. Federal Reserve Chair...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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