Janet Yellen sends USD flying

 

“A goal is a dream with a deadline.” — Napoleon Hill

 

 

MARKET NEWS

 

Yellen says rates may have to rise to prevent ‘overheating’ - FT

 

US Treasury secretary Janet Yellen warned on Tuesday that interest rates may need to rise to keep the US economy from overheating, comments that exacerbated a sell-off in technology stocks. “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” she said

 

Ether Prices Break Through $3,500 To Reach Fresh High

 

John Iadeluca, founder & CEO of multi-strategy fund Banz Capital, also weighed in, noting that “the $3,000 price level has long stood as a key area of resistance for Ethereum.” “The current price breakout past this level is indicative of increasing FOMO across both institutional and retail investment,” he stated.

 

NZD/USD Confined by March Range Ahead of New Zealand Employment Report – Daily FX

 

It remains to be seen if New Zealand’s Employment report will influence the near-term outlook for NZD/USD as job growth is expect to narrow to 0.2% from 0.6% in the fourth quarter of 2020, but signs of a slowing recovery may put pressure on the Reserve Bank of New Zealand (RBNZ) to further support the economy.

 

Stock Winners Fall in Latest Selloff Sparked by Inflation Fears - Bloomberg

 

Stock bulls have shrugged off inflation angst for months. That got a lot harder to do on Tuesday. Janet Yellen roiled financial markets when she said interest rates may have to rise moderately to keep the economy from overheating.

 

European Stocks Fall as Tech Sees Biggest Drop in Six Months - Bloomberg

 

The Stoxx Europe 600 Index closed down 1.4%, with almost all sectors in the red. Tech stocks plunged 3.7%, with ASML Holding NV and Infineon Technologies AG among the biggest decliners.

 

Silver Price Analysis: XAG/USD tumbles to $26.20 on Yellen’s comments – FX Street

 

Silver lost 2.5% in a few minutes during the American session and bottomed at $26.21 following comments from US Treasury Secretary Janet Yellen. XAG/USD then bounced to the upside.

 

Oil catches a last-minute bid into settlement to finish at $65.69 – Forex Live

 

It has been a great day for risk trades but oil has managed its third-best close of the year -- finishing narrowly below the March highs. It settled up $1.20 to $65.69, which was just off the session high of $65.84.

 

MORE HEADLINES

 

•    US set to approve Pfizer Covid vaccine for 12- to 15-year-olds – FT
•    A bill in New York aims to halt bitcoin mining for 3 years until its environmental impact can be assessed – Business Insider
•    Twitter CFO: No changes to our thinking on Trump's account
•    Palladium touches an all-time record high above $3,000 an ounce 
•    Dogecoin surges 30% to a record above 50 cents as speculative crypto trading continues
•    EU regulator starts ‘rolling review’ of China’s Sinovac COVID-19 vaccine – Market Watch
•    Ethereum's $400 billion market value makes it bigger than all but 12 publicly traded companies – Business Insider
•    Fed's Kaplan repeats call to "at least start discussing" taper – Forex Live

 

ANALYSIS

 

BOE: Three reasons why Super Thursday could become a sterling suffer-fest  - Forex Crunch

 

The Bank of England is set to leave its policy unchanged and potentially hint at tapering bond buys. 
1.    Weak inflation may hold the BOE from acting quickly. 
2.    A bright outlook for the economy is mostly priced into the pound. 
3.    Uncertainty about local and regional elections may prevent any sterling upswing.

 

Sam Zell Buys Gold With Inflation ‘Reminiscent of the ‘70s’ - BNN

 

Billionaire investor Sam Zell is seeing inflation everywhere, and has bought gold as a hedge. He said in a Bloomberg Television interview. “It feels very funny because I’ve spent my career talking about why would you want to own gold? It has no income, it costs to store. And yet, when you see the debasement of the currency, you say, what am I going to hold on to?”

 

CHART

 

USD/CAD – Weekly Candlesticks

 

  
Source: GKFX Prime Metatrader 4 

 

USD/CAD has dropped to potential long term support from a confluence of a rising trendline connecting the 2015 and 2017 lows as well as a falling trendline connecting the lows since August. - Prepared by Trading Writers*

 

CALENDAR

 

*Times in GMT

 

 
Source: FX Street Economic Calendar

 

Footnotes

 

1.    https://www.fxstreet.com/economic-calendar
2.    https://www.ft.com/content/68721f4c-7635-43c3-aa9d-4caf7870ea18
3.    https://www.ft.com/content/049f4a79-abff-4a6c-a7c1-13409e8f63ae
4.    https://www.businessinsider.com/new-york-ny-bill-bitcoin-mining-environment-assessment-2021-5
5.    https://www.forbes.com/sites/cbovaird/2021/05/04/ether-prices-break-through-3500-to-reach-fresh-high/?sh=782b2593677d
6.    https://ca.finance.yahoo.com/news/stock-winners-fall-latest-selloff-163905995.html
7.    https://ca.finance.yahoo.com/news/twitter-cfo-no-changes-to-our-thinking-on-trumps-account-171855099.html
8.    https://ca.finance.yahoo.com/news/european-stocks-fall-tech-sees-161243281.html
9.    https://www.forexcrunch.com/boe-three-reasons-why-super-thursday-could-become-a-sterling-suffer-fest
10.    https://www.marketwatch.com/story/palladium-touches-an-all-time-record-high-above-3-000-an-ounce-11620148603
11.    https://www.fxstreet.com/news/silver-price-analysis-xag-usd-tumbles-to-2620-on-yellens-comments-202105041549
12.    https://www.marketwatch.com/story/eu-regulator-starts-rolling-review-of-chinas-sinovac-covid-19-vaccine-11620140743
13.    https://markets.businessinsider.com/currencies/news/ethereum-price-400-billion-market-value-bigger-all-but-13-companies-2021-5-1030385257
14.    https://www.forexlive.com/news/!/oil-catches-a-last-minute-bid-into-settlement-to-finish-20210504
15.    https://www.forexlive.com/centralbank/!/feds-kaplan-repeats-call-to-at-least-start-discussing-taper-20210504
16.    https://www.bnnbloomberg.ca/sam-zell-buys-gold-with-inflation-reminiscent-of-the-1970s-1.1599041