Market overview (30 March 2016)
Increasing economic turbulence outside of the United States together with China’s slowdown and a decline in oil prices were the reasons for delaying the interest rates increases this year, the Federal Reserve Chairwoman said in the yesterday’s speech. Avoiding a precise timeline, Janet Yellen mentioned that the Fed will be considering “only gradual increases.”
For now, the monetary policy will continue to be accommodative to the economic developments and will respond to any new occurrences arising on the way. Furthermore, Fed has downgraded its previous economic outlook for this year.
The inflation level and the employment in the country will be closely observed and should at any point it satisfying the required targets, the next hike will be considered immediately. On the other hand “if the expansion was to falter or if inflation was to remain stubbornly low, the [Fed] would be able to provide only a modest degree of additional stimulus by cutting the federal funds rate back to near zero”. The negative interest rate was not mentioned.
Resulting from fading expectation for the interest rate hike, the US dollar declined against all its major counterparts. The US Dollar index has reversed its recent recovery and continued the downward trend, touching 95.01 mark this morning and likely heading to retest its previous five-month low.
Below are today’s major news releases
|1:15 PM||USD||High||ADP Non-Farm Employment Change||Monthly||195K||214K|
|3:30 PM||USD||High||Crude Oil Inventories||Weekly||3.1M||9.4M|
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