Forex Today: It’s all about the dollar and the Fed
|What you need to know on Friday, January 28:
The market was all about the dollar and the Fed after the US central bank pretty much confirmed a rate hike coming in March, fueling speculation of at least four hikes this year. The greenback got additional support from upbeat growth figures, as Q4 GDP came in at 6.9%, much better than the 5.5% expected. Meanwhile, unemployment claims in the week ended January 14 met expectations by printing at 260K.
The American currency extended its post-Fed rally to reach a multi-month high vs the shared currency, as EUR/USD plunged to 1.1130. GBP/USD fell to 1.3354, a one-month low, with both pairs settling nearby.
Commodity-linked currencies also fell, with AUD/USD currently trading at around 0.7030 and USD/CAD at 1.2730. Gold prices collapsed, with the bright metal falling below $1,800 a troy ounce. Crude oil prices advanced to fresh multi-year highs but lost momentum ahead of the daily close and finished the day little changed, with WTI settling at $86.80 a barrel.
Wall Street started the day with a firm footing, posting substantial intraday gains. However, it changed course in the final hours of trading, with indexes falling into the red. US Treasury yields retreated from Wednesday’s peak, with the yield on the 10-year note down to 1.78%. The greenback held on to gains despite the changing direction in equities and yields.
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