US dollarThe market mood has soured after Jerome Powell, Chairman of the Federal Reserve, rejected calls for negative interest rates. The dollar was up on Thursday morning after Powell’s testimony.
The Fed Chair Jerome Powell, in a highly anticipated speech on Wednesday, rejected the idea of negative interest rates and helped ease the bearish pressure surrounding the greenback. Powell also said that the economic path ahead was highly uncertain and subject to significant downside risks. This comes amid fears about the second wave of coronavirus infections, which coupled with fading hopes for a quick economic recovery led to a fresh leg down in the US equity markets.
GBP/USD has been one of the biggest losers amid an ongoing UK lockdown and as the nation is getting ready for a long recession. Chancellor of the Exchequer Rishi Sunak extended the furlough scheme and Andrew Bailey, Governor of the Bank of England, opened the door to further bond-buying.
EUR/USD has dropped in range but has yet to test the lows. Italy approved a new €55 billion stimulus budget and bond markets seem to accept it, despite tensions between the German constitutional court and the European Central Bank, which is supporting the government.
USD/JPY remains pressured below 107.00 amid broad risk-off, benefits from recent USD weakness. Doubts over the Fed rate, trade/virus woes keep the pair heavy. Japan’s Machine Tool Orders, US Jobless Claims to decorate calendar.
Oil prices have remained stable after inventory data showed a surprising drawdown and amid speculation that other countries will follow Saudi Arabia with additional, voluntary cuts. Demand from China is on the rise. Gold was up on Thursday morning, with investors turning to the yellow metal after a grim speech by U.S. Federal Reserve Chair Jerome Powell.
Moving ahead, market participants now look forward to the release of the US Initial Weekly Jobless Claims. The data might influence the USD price dynamics and produce some meaningful opportunities later during the early North American session.