• Americas roundup:dollar falls as FED sticks to three rate-hike view for 2018,gold rises,US stocks end modestly lower,Oil hits 6-wk high on inventory data, OPEC compliance, Iran worries-march 22nd 2018

    Source: FxWire Pro - Media Round Ups / 21 Mar 2018 17:37:42   Eastern Standard Time


    Market Roundup

    • Fed raises rates, signals confidence in strengthening economy.

    • Trump supports massive U.S. funding bill, shutdown looms.

    • Cryptocurrency issuers clean up, shun US investors as SEC gets tough.

    • U.S. top trade diplomat says 'nobody wins' trade war but readies China action.

    • U.S. Fed Funds Target Rate, 1.625%, 1.625% forecast, 1.375% previous.

    • U.S. Fed Int On Excess Reserves, 1.75%, 1.50% previous.

    • U.S. Feb Existing Home Sales, 5.54 mln, 5.40 mln forecast, 5.38 mln previous.

    • U.S. Feb Existing Home Sales % change, 3.0%, 0.5% forecast, -3.2% previous.

    • U.S. Q4 Current Account USD, -128.2 bln, -125.0 bln forecast, -100.6 bln previous, -101.5 bln revised.

    • U.S. MBA Mortgage Applications w/e, -1.1%, 0.9% previous.

    • U.S. Mortgage Market Index w/e, 383.0, 387.4 previous.

    • U.S. MBA Purchase Index w/e, 249.9, 246.5 previous.

    • U.S. Mortgage Refinance Index w/e, 1,107.7, 1,159.3 previous.

    • U.S. MBA 30-Yr Mortgage Rate w/e, 4.68%, 4.69% previous.

    • UK wage growth near 2 1/2-year high, boosting chances of BoE rate hike.

    Looking Ahead - Economic Data (GMT)

    • 21 Mar 20:00 New Zealand Cen Bank Interest Rate, 1.75%, 1.75% previous

    • 22 Mar 00:30 Japan Mar Nikkei Mfg PMI Flash, 54.1 previous

    • 22 Mar 00:30 Australia Feb Employment, 20.0k forecast, 16.0k previous

    • 22 Mar 00:30 Australia Feb Full Time Employment, -49.8k previous

    • 22 Mar 00:30 Australia Feb Participation Rate, 65.6% forecast, 65.6% previous

    • 22 Mar 00:30 Australia Feb Unemployment Rate, 5.5% forecast, 5.5% previous

    Looking Ahead - Events, Other Releases (GMT)

    • N/A Riksbank's Martin Floden will also hold a breakfast presentation in Karlstad about the economic situation and current monetary policy - Karlstad

    • N/A ECB general council meeting - Frankfurt

    • N/A Participation by the ECB President Mario Draghi in the European Council meeting (to March 23) - Brussels

    • 06:25 2017 annual report of the Swiss National Bank – Bern

    • 08:30 ECB's Sabine Lautenschlaeger participates in a panel discussion at the 9th annual EFR Stakeholder Round Table on "Financial Fragmentation or Integration" hosted by the ING Group - Brussels

    • 09:00 Introductory remarks by ECB bank supervisory chief Daniele Nouy at "Joint Governance Conference: Governance expectations for banks in a changing financial environment" organised by the ECB - Frankfurt

    • 12:00 Bank of England announces its interest rate decision and publishes the minutes of the meeting – London

    • 16:15 Norway Central Bank Governor Oystein Olsen will give a speech in Washington D.C. – Washington, D.C.

    • 17:00 Bank of England's Dave Ramsden speaks at HM Treasury annual fintech conference - London

    • 19:00 Bank of Canada Senior Deputy Governor Carolyn Wilkins speaks at Rotman School of Management - Toronto

    Currency Summaries

    EUR/USD is likely to find support at 1.2200 levels and currently trading at 1.2340 levels. The pair has made session high at 1.2348 and hit lows at 1.2248 levels. Euro jumped higher  against the dollar on Wednesday, as the U.S. dollar eased after Federal Reserve policy-makers signaled they expected three interest rates for 2018, fewer than the market participants anticipated. The U.S. central bank as expected delivered a quarter point rate hike to lift its target range on key borrowing costs to 1.50-1.75 percent. However, it disappointed currency traders who had bet it was prepared to raise rates perhaps four times this year as the jobs market approaches full employment. In its first policy meeting under new Fed chief Jerome Powell, the U.S. central bank said inflation should move higher amid a stronger economy after years below its 2 percent target. Policymakers were largely split as to whether a total of three or four rate hikes would be needed this year in their rate projections, known as the “dot plot” because the outlooks are plotted on a chart. The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.79 percent. It booked its steepest one-day drop since Jan. 24 when it fell 1 percent. The euro was up 0.85 percent to $1.2340,  its biggest one-day gain in nearly two months at $1.2340.

    GBP/USD is supported in the range of 1.4000 levels and currently trading at 1.4140 levels. It reached session high at 1.4152 and dropped to session low at 1.4040 levels. The British rose sharply against the greenback on Wednesday as pound strengthened on back of weaker dollar and upbeat jobs data. British workers' overall pay rose at the fastest pace in more than two years during the three months to January, bolstering the chances that the Bank of England will raise borrowing costs in May. The Office for National Statistics said workers' total earnings, including bonuses, rose by an annual 2.8 percent the biggest increase since the three months to September 2015 after an upwardly revised 2.7 percent rise in the three months to December. Dollar eased after Fed raised interest rates and forecast at least two more hikes for 2018, fewer than the four some traders had anticipated. The hike was widely expected, and new Fed Chairman Jerome Powell said in a news conference after the rate-hike announcement that the U.S. central bank was trying to take the "middle ground" in raising rates. Sterling extended gains after Fed rate decision to peak at $1.4147, up nearly half a percent. Before the data release, sterling was up nearly a quarter of a percentage point as the dollar eased.

    USD/CAD is supported at 1.2880 levels and is trading at 1.2900 levels. It has made session high at 1.2990 and lows at 1.2886 levels. The Canadian dollar strengthened against its U.S. counterpart on Wednesday as Canadian dollar was buoyed by higher oil prices and a report that the U.S. had dropped one of its contentious demands in the renegotiation of the NAFTA trade deal. President Donald Trump's administration has dropped a demand that all vehicles made in Canada and Mexico for export to the United States contain at least 50 percent U.S. content, The Globe and Mail reported. President Donald Trump's administration dropped the demand during the North American Free Trade Agreement negotiations in Washington last week, which included talks between Canada's Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer, the Canadian newspaper reported. The quotas for U.S. content in autos have been a major bone of contention for Mexico, Canada and many companies. The Bank of Canada has been worrying that uncertainty over the future of the North American Free Trade Agreement may weigh on the economy. Comments last week from Governor Stephen Poloz have reinforced expectations the central bank will take its time raising rates after hiking them three times since last July. The Canadian dollar  was last trading at C$1.2901 to the greenback, or 77.51 U.S. cents, up 1.3 percent in its largest advance since Dec. 1.The currency touched its strongest level since March 13 at C$1.2890.

    USD/JPY is supported around 105.66 levels and currently trading at 106.00 levels. It peaked to hit session high at 106.62 and made session lows at 105.86 levels. The Japanese yen strengthened against the dollar on Wednesday as greenback fell after U.S. Federal Reserve raised interest rates and forecast at least two more hikes for 2018, falling short of the three more increases many expected. In its first policy meeting under new Fed chief Jerome Powell, the U.S. central bank indicated that inflation should finally move higher after years below its 2 percent target and that the economy had recently gained momentum. The Fed also raised the estimated longer-term "neutral" rate, the level at which monetary policy neither boosts nor slows the economy, a touch, in a sign the current gradual rate hike cycle could go on longer than previously thought. Powell, who took over from former Fed chief Janet Yellen in early February, said the central bank was staying on a path of gradual rate increases but needed to be on guard against inflation. The rate hike was widely expected. All 104 economists polled by from March 5-13 said the Fed would increase borrowing costs this week. U.S. stocks rose after the policy statement before paring gains to close lower. U.S. Treasury yields fell and then recovered. The dollar recorded its steepest one-day loss in nearly two months against a basket of currencies. Against the yen, the dollar fell 0.3 percent to 105.00 yen, after Tuesday's gains of 0.4 percent.

    Equities Recap

    European shares slid on Wednesday as concerns over further trade tariffs dented investors sentiment.

    UK's benchmark FTSE 100 closed down by 0.32 percent, the pan-European FTSEurofirst 300 ended the day down by 0.16 percent, Germany's Dax ended down  by 0.01 percent, France’s CAC finished the day down by 0.28 percent.

    U.S. stocks ended slightly lower on Wednesday, with major indexes giving up gains in choppy trade after the Federal Reserve raised U.S. interest rates, while a strong gain in the energy space helped limit losses.

    Dow Jones closed down by 0.17 percent, S&P 500 ended down by 0.17 percent, Nasdaq finished the day down by 0.25 percent.

    Treasuries Recap

    U.S. Treasury yields were slightly lower on Wednesday after the Federal Reserve raised interest rates and forecast two more hikes for 2018, fewer than the three that many market participants had expected.

    Two-year note yields, which are highly sensitive to interest rate policy, jumped as high as 2.366 percent, the highest since September 2008, before falling back to 2.308 percent.

    Benchmark 10-year note yields increased to 2.936 percent, the highest since March 12, before retracing to 2.894 percent.

    Commodities Recap

    Gold rose more than 1 percent from a three-week low on Wednesday after the U.S. Federal Reserve increased interest rates and forecast at least two more hikes for 2018, falling short of the three more increases many expected.

    Spot gold rose 1.8 percent at $1,334.75 per ounce by 3:34 p.m. EST (1934 GMT), earlier hitting $1,335.47, its highest since March 7. Bullion had dropped as low as $1,306.91 in the previous session.U.S. gold futures for April delivery settled up $9.60, or 0.7 percent, at $1,321.50 per ounce.

    Oil hit a six-week high on Wednesday, closing in on a 3-year peak set in late January, on a surprise decline in U.S. inventories, strong compliance on OPEC production cuts, and persistent concern related to the Iran nuclear deal.

    Brent crude futures rose $2.05, or 3 percent, to settle at $69.47, nearly a 7-week high.
    U.S. West Texas Intermediate (WTI) crude futures gained $1.63, or 2.6 percent, to settle at $65.17, their highest since Feb. 2.