The interesting news today in FX came from Portugal…JPow’s first public comments since June’s FOMC press conference.
While participating in a panel discussion at the European Central Bank’s monetary policy conference in Sintra, Portugal, Federal Reserve Chair Jerome Powell expressed satisfaction with the progress on inflation but emphasized that he wants to see more evidence before being confident enough to start cutting interest rates.
Those are definitely NOT hawkish comments.
But he’s also not a dove…yet.
The Fed has the tough job of trying to balance the timing of rate cuts to avoid re-accelerating inflation or causing a recession.
Powell highlighted that achieving a 2% inflation target remains a priority and the job market is cooling appropriately, reducing inflationary pressures.
Most economists expect the first rate cut in September, but Powell provided no specific timeframe.
While not committing to a September rate cut, he mentioned that risks between inflation and the labor market are becoming more balanced.
Translation: “While we won’t tell you when we’ll cut rates, we’re telling you that we won’t raise rates.”
If you’re interested or maybe in need of a natural sleep aid, here’s a video featuring JPow participating in a panel discussion alongside Christine Lagarde, the head of the European Central Bank (ECB), and Roberto Campos Neto, the head of Brazil’s central bank.
At the 2:36 mark, he’s asked about a September rate cut.
His confirmation that the data is trending in the right direction supports the idea that a September rate cut is likely.
Currency Market Movers
Which currency pairs gained the most today?
CAD/CHF was the leader of the pack, gaining 0.52% or 34 pips.
As shown by our FX Market Movers page, the top 5 gainers had pretty small gains.
Looking at CAD/CHF’s Trend Following Rating, it’s showing a Bullish rating.
Which currency pairs lost the most today?
USD/CAD was the biggest loser, falling 0.42% or 57 pips.
Currency Strength
What was the overall strength or weakness of individual major currencies today?
Based on the Currency Strength Meter on MarketMilk™, CAD was the strongest currency, while CHF was the weakest currency.
If we dive a little deeper and look at just how major currency pairs moved over the past 24 hours, we can see the U.S. dollar started falling after JPow’s comments.
Currency Short-Term Trends
When it comes to short-term trend strength, the British pound (GBP) shows the most bullish strength, along with the euro (EUR)
The Japanese yen (JPY) and Swiss franc (CHF) show the most bearish strength.
Keep an eye on the US dollar (USD), its trend is still bullish but looks like that’s weakening.
Currency Heat Map
If we take a look a look at our Currency Heat Map, we can see the continued weakness of JPY.
It’s trading below its weekly, monthly, AND yearly lows.
Currency Volatility
Which currency was the most volatile today?
Based on our Currency Volatility Meter, it’s the Canadian dollar (CAD).
Which currency PAIR was the most volatile today?
Given CAD was the most volatile currency, it has to be a CAD pair. But which one?
CAD/CHF. It moved over 0.65% or 42 pips.
