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USD dips, S&P rises after Federal Reserve Chairman Jerome Powell speaks

Published on: 09/12/18 3:02 PM

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Category: Currency, Forex, Latest News, Market, Trade, Trading, US News, World News

Chairman Jerome Powell

On Friday, US Federal Reserve Chairman Jerome Powell spoke at Jackson Hole Central Banking Symposium. Powell’s latest talk wasn’t the best news for those who have been hawkish in terms of economic speculation. While the US Dollar dipped following the chairman’s talk, the S&P 500 saw a record high in terms of its numbers. In addition, gold prices soared to a level that hasn’t been seen since 2017.

Powell’s speech

Powell’s speech this past Friday saw the Chairman maintaining the cautious approach due to difficulties in interpreting data. He also remained optimistic about inflation. When Powell didn’t give any new information out during Friday’s talk, it didn’t give any support to the US dollar. As Seeking Alpha’s Alfonso Esparza reported, there were already two US rate hikes for 2018 priced into the markets. It’s expected there will be a 25 basis points hike coming on September 26 and then another before year’s end.

According to Daily FX, all of the global benchmark indexes showed positive signs of growth on Friday for European and US trading sessions. The Australian and New Zealand dollar prices also saw an increase. Australia’s political situation had shown signs of uncertainty but those were soothed once Prime Minister Malcolm Turnbull was removed from his position. Scott Morrison was elected as the 30th Prime Minister of Australia ending the power struggle between Peter Dutton and Turnbull.


Meanwhile, the Japanese Yen was considered among the worst performers of all FX majors for the day. It’s believed that with less possibility for a global tightening of credit that the Yen may continue moving down while Australia and New Zealand’s dollars will keep moving upwards.

Tokyo’s Nikkei 225 may see a near-term rise based on pushing above its near-term descending resistance line. The Nikkei 225 saw its fourth-straight day of gains on its chart making for a continued winning streak. In fact, it was the longest stretch of successful days since July 18.

The upcoming economic data next week won’t give any reason to change the US Federal Reserve‘s current stance about the rate hikes. There will be a second reported estimate for Q2 GDP data in the US but that’s expected to stay close to 4 percent.

Other events coming up on the economic calendar this week will include USD Crude Oil Inventories, the New Zealand ANZ Business Confidence and AUD Private Capital Expenditures report. All of these will arrive on Wednesday (Aug. 29) with the CAD GDP report scheduled for Thursday morning.