Forex Today: Stocks Rally on Powell Inflation Decline Remarks

The Chair of the Federal Reserve Jerome Powell reassured stock markets yesterday with remarks that inflation is on track to reach the Fed’s 2% target in 2024.


  1. In closely watched remarks towards the end of the yesterday’s New York session, Fed Chair Jerome Powell said that inflation has begun to ease, and that it will take time, but will reach the Fed’s 2% target in 2024. These remarks initially sent stocks surging higher, but when Powell mentioned that there may be a data-driven need for further rate hikes, stocks fell sharply, before rallying back to their highs later. By the end of the day, both the S&P 500 and the NASDAQ 100 indices had closed up by more than 1% each, with the NASDAQ notably making its highest close in almost 5 months. The US stock market is looking quite bullish, although the Asian session has seen quite flat stock markets.
  2. The Australian Dollar has continued to gain against other currencies following the Reserve Bank of Australia’s implementation yesterday of a 0.25% rate hike and language in its rate statement which makes clear it expects to see further rate increases over the near future.
  3. The S&P 500 Index made a golden cross last ThursdayThis is typically a strong long-term buy signal, although the price has fallen since then.
  4. Some commodities did quite well yesterday, with some continuing to rise after having recently made significant bullish breakouts, notably Sugar and Copper.
  5. In the Forex market, the Australian Dollar is the strongest currency right now, while the New Zealand Dollar is the weakest. There is some interest in the EUR/USD currency pair today as it hit a key 50-day moving average for the first time in month but bounced back to close above $1.0700. Its long-term bullish trend remains technically valid but is in danger.
  6. FOMC Member Williams is being interviewed today.
  7. Daily confirmed new global coronavirus cases decreased last week for the seventh consecutive week.
  8. Total confirmed new coronavirus cases worldwide stand at over 676.5 million with an average case fatality rate of 1.00%. Daily new confirmed cases have fallen to a low level not seen since June 2020.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.