Powell speech: Fed is not thinking about raising rates

Eren Sengezer FXStreet

"It is important that pandemic unemployment benefits are continued in some form after they are due to expire," Jerome Powell, Chairman of the Federal Reserve System, said while testifying before House Financial Services Committee on Wednesday.

Additional takeaways

"US needs to find a way to provide continued fiscal support to those people in hard-hit industries."

"US economy is in the early stages of a bounce-back."

"If the virus remains under control, there should be more positive economic data."

"Third phase of recovery is that workers in hardest-hit industries will continue to struggle."

"It does seem very likely that there will be more teleworking in the future."

"Pandemic is accelerating pre-existing trends in the economy, such as teleworking and online shopping."

"Fed plans to keep its foot on the gas until it is sure the US is on road to recovery."

"The Fed is not thinking about raising rates, that economy will need support for an extended period of time."

"Continuing to look at the expansion of credit-rating facilities for its programs."

Market reaction

The US Dollar Index clings to small daily gains near 97.10 after these remarks.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.