US dollar down on dovish Fed

22 March, 2019

The AUD/USD may be in for a rough time as the year unfolds with the US Federal Reserve finally admitting that the economy was not as strong as they earlier predicted which has forced them to put a hold on any further interest rate hikes this year and leave open the possibility of a rate cut should the need arise.

Unemployment in the US is now predicted to hit 3.7 percent which is slightly higher than predictions made in December while inflation is expected to come in at 1.8 percent which is slightly lower than the 1.9 percent forecasted and well short of the Feds target rate of 2 percent.

As predicted yesterday, the Fed kept interest rates on hold but the following monetary statement was much more dovish than analysts had predicted which the US central Bank blamed on household spending and business investment

“Growth of economic activity has slowed from its solid rate in the fourth quarter,” the Fed said.

“Recent indicators point to slower growth of household spending and business fixed investment in the first quarter ... overall inflation has declined.” They added.

US Fed President Jerome Powell even left the option on the table for a rate cut, depending on how thing pan out as the year unfolds which many saw as not possible just a few weeks ago

This factor is likely to weigh on the US dollar in the Forex market over the coming months

“The data are not currently sending a signal that we need to move in one direction or another, in my view, it’s a great time for us to be patient.” Mr Powell said

This now brings to an end the current rate of interest rate hikes from the Fed and leaves the benchmark interest rate around 1 percent lower than recent historical values

Pound jumps most in two years

The British pound has jumped its highest level since May 2018, briefly hitting the $1.35 mark against its US counterpart after British Prime Minister Boris...

Gold higher on rate cut expectations

The gold price surged back above the $1500 mark in yesterday's trading session after another round of disappointing economic data from the US...

Oil awaits Fed decision

The Oil price was trading lower again yesterday on Monday, weighed down by worries about the current state of economic growth, and some major...

Oil surges on conflict concerns

The oil price has continued to rise in today’s trading session after yesterday’s gains on the back of attacks on two oil tankers in the Gulf of Oman...

Gold need to hold this level

The gold price is now trading at its lowest level since the start of the year and is now consolidating around the $1275 mark and according to one...

Gold faces key moment

The gold price has remained above the $1300 mark in today's trading session after breaking this important level yesterday and today's outcome...

Gold needs some big news

The gold price is under further pressure in today's trading session as investors ponder the chances of another rate hike from the US Federal Reserve after the release...

Good news for the precious metal

Gold just got another reason to cheer after the latst minutes meeting from the US Federal reserve where the tone left many analysts predicting that...

Gold to stay above $1300

The gold price has recovered strongly over the past 3 trading sessions after coming perilously close to touching the $1300 mark and...