US Monthly PPI will be announced on Friday at 15:30 MT time.
Greenback dives to wager on Fed rate reversal
Information is not investment advice
On Thursday, the evergreen buck faced heavy losses in Asia because the key US bank shocked the financial markets by giving up all of its plans to have rates lifted in 2019, which appears to be an indication that its three-year campaign to stabilize its monetary policy might be at an end.
Market participants rushed to price in the likelihood of rate cuts a bit later in 2019. Meanwhile, Treasury yields headed south to their lowest value since early last year.
The Fed's swerve pressured the evergreen buck, pushing it down to 110.67 yen – a 0.6% dive – the most impressive descend since the flash crash of early January.
As for the common currency, it rallied to a seven-week maximum, hitting $1.1424, rebounding from its recent minimum of $1.1177. It pushed the greenback down to 95.929 versus a group of currencies, having dived 0.5% overnight.
Previously, the Fed had tipped two rate lifts in 2019. Additionally, the major US financial institution also trimmed its estimates for inflation and economic surge, while increasing that for unemployment.
Yields on two-year notes headed south to 2.40%, which is in line with the effective funds rate, while five-year yields declined to 2.33%.
For the US currency, the only solace was the fact that other major banks worldwide have also turned quite dovish for recent months as surge speeded down pretty much everywhere.
The given need for stimulus simply means that many major financial institutions won’t be willing to see their currencies appreciate versus the evergreen buck, providing them with a reason to sound more accommodative.
Meanwhile, firm household spending along with business investment raised New Zealand’s GDP by 0.6% in the December quarter, assisting the New Zealand dollar to get to a seven-week maximum of $0.6923.
Australian Private Capital Expenditure will be out on Thursday at 2:30 MT time!
Oil jumped to March high, stocks are heading to record highs, while the US dollar is on the back foot.
News geeks get ready for the chain of US reports, which starts at 15:30 MT time on November 25!