Forex Marketz Daily Forex News – Fully Markets Update
The almighty U.S. dollar (USD) is on the defensive against most of its G-10 Forex trade partners during the Asian trade session on Wednesday. Traders are waiting on commentary from Federal Reserve Board (Fed) Chair Jerome Powell.
Currency traders are starting to debate whether or not the U.S. central bank will adopt a negative interest rate policy.
Risk sensitive currencies, like the New Zealand dollar and the Australian dollar, lack momentum. Traders are worried about a second wave of Covid-19 infections is economies open up too fast. There are already reports of new cases in the Asian and Pacific Rim.
The benchmark USD/JPY currency exchange rate has fallen from Tuesday’s high price point at 107.76 yen to trade at 107.15 yen. Yesterday, the yen was at its highest price point since 24 April.
The headline EUR/USD Forex market is last trading at 1.0848 and below the key level at 1.09. The euro has fallen by 0.4 percent against the U.S. currency since yesterday.
The Dollar will react to Powell’s Speech
Federal Reserve Board (Fed) Chair Jerome Powell will be talking about the economy during a webcast schedule for 1 pm GMT time today.
U.S. monetary policy board members have said they are not considering a negative interest rate policy or any move below zero. However, Forex traders are thinking this could be a possibility if the deterioration in U.S. economic activity continues to accelerate.
On Tuesday, President Donald Trump, tweeted that the Federal Reserve should move rates into the negative. This is a hot button issue in the financial markets and U.S. money market instruments are already pricing that realty in.
Traders digest Inflation Data
Yesterday, the U.S. released their core and headline consumer price indices (CPI) for April. Consumer prices, month to month, fell at their fastest rate since the 2008 global financial crisis.
For the month, the headline CPI fell 0.8 percent. This is the second monthly contraction in a row and raising worries about a recession and the extent of how bad it is in the United States.
