Forex news for North American trading on June 16, 2021:
- Gold down $28 to $1829
- US 10-year yields up 11 bps to 1.57%
- WTI crude down 24-cents to $71.88
- S&P 500 down 23 points to 4223
- USD leads, CHF lags
We had at least three days of waiting and minimal trade ahead of the Fed but all the build-up was worth it as the Fed delivered a big surprise. The anticipation ahead of the meeting was that they might move the dots to show one 2023 hike. Instead it was two hikes and 7 of 18 are now forecasting a 2021 hike.
The market reaction spoke in a big way after the decision with the dollar soaring and continuing to rise when Powell offered little push back. USD/JPY moved to 110.30 from 109.90 in a flash but then added another 30 pips from there.
With trading winding down, it looks like the US dollar will finish at the highs of the day.
Cable fell victim to the dollar rally as it dropped to 1.3995 from 1.4100, which is the first time below the figure since May 9.
The euro will be one to watch in the days ahead as it tests 1.20 once again. So far it’s held the line so far after a fall from 1.2125. If that breaks, the May low of 1.1986 is in play.
More broadly, there are some interesting patterns shaping up on the dollar charts. We’ll have more on those in the hours ahead.