Market wrap: Fed leaves door open for a June hike, dollar takes off - Westpac

Ross J Burland FXStreet

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The Fed left the door open to a June hike in its FOMC statement, giving the US dollar and interest rates a small boost.

Interest rates: US 10yr treasury yields rose from 2.28% to 2.32% while. 2yr yields rose from 1.26% to 1.30%.Fed fund futures yields firmed, now pricing a June rate hike as an 80% chance.

Most of the rate rises came after the FOMC statement, where the Fed viewed the recent soft patch in the economy as transitory, the inflation narrative also tweaked slightly.

Currencies: The US dollar index is 0.3% higher, most gains occurring after the FOMC statement. EUR fell from 1.0935 to 1.0893. USD/JPY extended recent gains from 112.00 to 112.67 – a six-week high. AUD underperformed, falling from yesterday’s high of 0.7540 to 0.7421. NZD similarly fell from 0.6969 to 0.6867. AUD/NZD slipped further from 1.0820 to 1.0775."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD looks to regain the 200-day SMA

EUR/USD regains some balance and trade just above 1.1600 the figure ahead of the opening bell in Asia. The pair initially dipped to the 1.1530 zone for the first time since November, always following the stronger US Dollar and the marked flight-to-safety in the context of the ongoing Middle East crisis

GBP/USD slips below key averages as geopolitical risks mount

GBP/USD fell about 0.35% on Tuesday, settling around 1.3350 after slipping below the 200-day Exponential Moving Average for the first time since early December. The pair has pulled back sharply from its late-January high near 1.3870, shedding over 500 pips in a series of lower highs and lower lows.

Gold moves closer to $5,150 amid sustained safe-haven flows

Gold climbs back above $5,100 during the Asian session on Wednesday, moving away from an over one-week low, touched the previous day. Sustained safe-haven flow, amid escalating geopolitical tensions in the Middle East, acts as a tailwind for the bullion. However, a bullish US Dollar and reduced bets for more aggressive easing by the US Fed might keep a lid on the non-yielding yellow metal ahead of the US ADP report and ISM Services PMI later today.