- Yesterday’s FOMC meeting minutes were released showing that members had discussed tapering off on the asset purchase program. This contradicted recent remarks from the Fed Chair Jerome Powell, and resulted in the USD strengthening for a few hours due to the hawkish surprise. However, the USD is now weakening again.
- Global stock markets are mostly recovering today after dipping yesterday on continuing concerns about resurgent inflation, especially in the U.S.
- Cryptocurrencies are recovering after falling very sharply. At one point yesterday, Bitcoin was trading as low as $30k, which is a more than 50% fall from its record high just a few weeks ago. Ethereum has suffered a similar fate, briefly trading below $2k. However, the recovery over recent hours looks firm, so we may well be seeing an effective “buy the dip” in crypto right now that could pay off for bulls.
- The precious metal gold yesterday reached a new 4-month high price against the U.S. dollar. It remains an effective buy, as the bullish momentum suggests still higher prices are likely to be reached over the coming days.
- Canadian inflation (CPI) data came in slightly higher than expected yesterday. It is now rising at an annualized rate of 3.4%, up from 2.2% last month. The release had little effect on the exchange rate of the Canadian dollar.
- Australian employment data released yesterday was mixed and inconclusive, with the unemployment rate lower than expected but the number of new jobs created also lower than the consensus forecast.
- Last week saw a second consecutive weekly fall in global new confirmed coronavirus cases and deaths, suggesting that the current wave of the pandemic is starting to retreat.
- Total confirmed new coronavirus cases worldwide stand at over 164.9 million with an average case fatality rate of 2.07%.
- The fastest progression in terms of immunizing a population against the coronavirus in all but the smallest states has been in Israel, which has given at least one shot to 63% of its entire population followed by the U.K. at 54%. For most of the world, a vaccine remains distant. However, the pace of vaccination in the European Union, which now has immunized 33% of its population, has picked up significantly. In the U.S., 47% of the population has been vaccinated.
- The rate of new coronavirus infections appears to now be increasing most quickly in Argentina, Bahrain, Bolivia, Brazil, Costa Rica, Cuba, Dominican Republic, Egypt, Haiti, Honduras, South Korea, Malaysia, Nepal, Sri Lanka, Taiwan, Trinidad, Uruguay, and Vietnam.
Forex Today: Minor Hawkish Surprise from FOMC Wears Off
Adam Lemon
Risk assets bounce back after short-term USD strengthening.