Dot Plot Fails To Bring Any Changes
The Greenback started the week on a high note but dropped due to the disappointing dot plot. The FOMC “dot plot,” is part of the Fed’s Summary of Economic Projections released along with its policy decision and indicates where each member in the meeting thinks the fed funds rate should be at the end of this year and longer term as well.
The Japanese yen meanwhile took advantage of the risk-aversion to record gains this week.
Tuesday: Dollar Higher Ahead of FOMC, CAD Recovers Slightly
The US dollars was able to hold on to its recent gains while also recording a few more on Tuesday as it took full advantage of the hawkish expectations for the Fed announcement and Powell’s first press conference.
USD/JPY went up from 106.29 to attain a session high of 106.51, USD/CHF also surged from 0.9529 to reach a session high of .9570, and EUR/USD meanwhile fell to a low of 1.2239.
Amongst the comdolls, the Loonie was the only one to record positive gains and stay in the green zone. The CAD was up thanks to the positive sales data from the country and a rise in crude oil price.
USD/CAD plunged to a low of 1.3050, CAD/JPY meanwhile went up to end the day trading at 81.57, EUR/CAD retreated to trade at 1.6000, and GBP/CAD also plunged to a low of 1.8282.
The pound sterling started the day on a high note due to the CPI report expectations. However, the CPI failed to meet the expectation of both the BOE and the market, leading to increased selling pressure and reducing the currency’s earlier gains. The pound ended the day as one of the losers.
GBP/USD went down by 41 pips or -0.29% to end the day at 1.4010, GBP/AUD also plunged by 64 pips or -0.36% to trade at 1.8183, and GBP/CAD plunged by 38 pips to end the day trading at 1.8324
The Euro was the biggest loser on Tuesday. Some reports from the region were released but none of them was able to pull out the euro from its misery.
EUR/USD went down by 53 pips or -0.43% to end the day trading at 1.2296, EUR/AUD also plunged but by 78 pips or -0.49% and traded at 1.5958, and EUR/CAD also fell by 55 pips to trade at 1.6083
Wednesday: Greenback Tumbles on FOMC Dot Plot
The greenback wasn’t able to extend its gains on Wednesday as the dot plot didn’t bring any changes.
USD/JPY surged to a session high of 106.65 before retreating to a low of 105.88, EUR/USD meanwhile dropped to 1.2251 before recovering to attain 1.2350, and GBP/USD surged to a session high of 1.4151.
The loonie was able to stay in the green zone for the second-consecutive day thanks to positive remarks on the NAFTA talks from Canada and the U.S
USD/CAD dropped below the 1.2900 handle, CAD/JPY meanwhile surged to a high of 82.41, and EUR/CAD plunged to end the day at 1.5937.
Fed Lifts Rates, Signals Tougher Stance As Economy Strengthens
On Wednesday, the U.S. Federal Reserve decided to raise interest rates while adding that two more rate hikes are expected before the end of the year. The rate hike is an indication confidence is growing about the potential of the tax cuts and government spending boosting the economy.
Thursday: EUR Affected By PMI Reports
The Euro was the worst-performing currency on Thursday, with the latest Euro Zone PMI reports failing to meet market expectations.
EUR/USD fell by 50 pips to trade at 1.2323, EUR/CHF also went down but by 37 pips or -0.31% to finish the day at 1.1676, and EUR/JPY plunged by 60 pips or -0.46% to trade at 130.17
The high risk-off vibes led to the Yen being high in demand. The JPY became the safe-haven for traders and was the top-performing currency for the day.
USD/JPY fell by 8 pips or -0.07% to finish the day trading at 105.61, AUD/JPY also plunged by 28 pips or -0.35% to 81.61, and CHF/JPY fell by -0.15% to trade at 111.47
Friday: Yen Surges as Trade War Fears Continues
The Japanese Yen performed excellently today due to the overall risk aversion that pushed the currency.
USD/JPY went down by -0.50% and now trades at 104.74; EUR/JPY also went down by 33 pips or -0.25% and currently stands at 129.19; and GBP/JPY plunged by 51 pips or -0.34% to trade at 148.88.
The Swiss Franc was also a safe haven for investors as it recorded gains against most of its major competitors.
USD/CHF dropped by 39 pips or -0.41% to trade at 0.9453; GBP/CHF also fell by 32 pips or -0.24% to 1.3346; and EUR/CHF is down by 16 pips or -0.14% to 1.1660.