Powell says Fed could raise rates more aggressively

 

“Always think outside the box and embrace opportunities that appear, wherever they might be.” — Lakshmi Mittal

 

 

HEADLINES

 

• Fed will raise rates more aggressively if needed, Powell says
• Dollar gains ground after Powell comments
• Crude settles up more than 7% as EU mulls Russian oil ban
• Gold gains as Ukraine fighting boosts safe-haven demand
• Wall Street pulls back as conflict, inflation risks linger
• EUR/CHF to develop a broad 1.04 to parity range – Credit Suisse
• USDJPY Near Term: Upside favored

 

FOREX

 

Fed will raise rates more aggressively if needed, Powell says

 

"The labor market is very strong, and inflation is much too high," Powell told a National Association for Business Economics conference. "There is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level, and then to move to more restrictive levels if that is what is required to restore price stability."

In particular, he added, "if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so."

 

Dollar gains ground after Powell comments

 

The dollar strengthened against a basket of major currencies on Monday, in the wake of comments from U.S. Federal Reserve Chair Jerome Powell that opened the door for the central bank to take a more aggressive monetary policy path.

The greenback had been fluctuating between slight gains and losses earlier in the day, and weakened slightly after comments from Atlanta Federal Reserve Bank President Raphael Bostic. The policymaker said he sees six rate hikes this year and two for 2023, a more dovish stance than most of his colleagues as he has concerns about the effects of the conflict between Russia and Ukraine on the U.S. economy.

 

COMMODITIES

 

Crude settles up more than 7% as EU mulls Russian oil ban

 

Oil prices settled up more than 7% on Monday, with global benchmark Brent climbing above $115 a barrel, as European Union nations disagreed on whether to join the United States in a Russian oil embargo after an attack on Saudi oil facilities.

 

Gold gains as Ukraine fighting boosts safe-haven demand

 

Gold prices rose on Monday as fighting in Ukraine boosted demand for safe-haven bullion, while investors kept a close tab on Moscow-Kyiv peace talks. While rumours of a potential compromise over the weekend brought gold prices down from their highs, the "next launching pad for gold would be the $1,900 area."

 

STOCKS

 

Wall Street pulls back as conflict, inflation risks linger

 

U.S. stock indexes declined on Monday, giving back some of last week's gains, and oil prices jumped, as investors refocused on risk as the conflict in Ukraine continued and the U.S. Federal Reserve reiterated its commitment to raise interest rates.

Global stocks rallied last week in anticipation of an eventual peace deal on Ukraine, but it will likely take actual progress to justify further gains.

On Monday, Ukraine defied a Russian ultimatum that its forces lay down arms before dawn in Mariupol, while the European Union was set to consider a possible energy embargo against Russia.

 

ANALYSIS

 

EUR/CHF to develop a broad 1.04 to parity range – Credit Suisse

 

“Shorter-term, next supports are seen at 1.0258. Below 1.0186/77 would then turn the short-term risks lower within the broad range for a fall back to support at 1.0159, then 1.0112.”

“Should strength extend through 1.0377/0404, we see resistance next at the 38.2% retracement of the March-21/March-22 fall at 1.0423, then another retracement resistance at 1.0483/84.”

 

CHART

 

USDJPY Near Term: Upside favored

 

Technical View: Long position above 118. Target 119.5. Conversely, break below 118, to open 117.5.

Comments: The pair remains supported. Further advance favored.

 

 

Source: Trading Central
 

 

CALENDAR

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

 

SOURCES

https://www.fxstreet.com/economic-calendar
https://www.reuters.com/business/fed-must-move-expeditiously-if-needed-more-aggressively-powell-says-2022-03-21/
https://www.reuters.com/business/global-markets-wrapup-1-pix-2022-03-21/
https://www.reuters.com/business/yen-kicks-off-another-week-under-pressure-with-central-bank-policy-focus-2022-03-21/
https://www.reuters.com/business/gold-little-changed-focus-remains-ukraine-crisis-2022-03-21/
https://www.reuters.com/business/energy/oil-prices-jump-over-4-eu-considers-russian-oil-ban-2022-03-21/
https://www.fxstreet.com/news/eur-chf-to-develop-a-broad-104-to-parity-range-credit-suisse-202203211418