{"id":51295,"date":"2023-01-10T10:00:05","date_gmt":"2023-01-10T08:00:05","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=51295"},"modified":"2025-10-13T12:51:07","modified_gmt":"2025-10-13T09:51:07","slug":"attention-turns-towards-powell-and-central-banks","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/id\/attention-turns-towards-powell-and-central-banks\/","title":{"rendered":"Attention turns towards Powell and central banks"},"content":{"rendered":"

The USD continued to weaken against its counterparts yesterday as hopes of the market for an easing of the Fed\u2019s rate hiking path remained present creating a more optimistic market sentiment. Given the market\u2019s focus on the Fed\u2019s monetary policy, we highlight the speech of Fed Chairman Powel in a symposium organized by the Swedish central bank later today. Should the Fed Chairman actually maintain an intense hawkish tone, that would come at odds with market expectations and thus could provide some support for the USD and vice versa. For the record it should be noted that Fed policymakers sounded quite hawkish yesterday with San Francisco Fed President Daly seeing rates rising above 5% while Atlanta Fed President Bostic seems to agree and adds that rates should remain above 5% for a \u201clong time\u201d according to Bloomberg. At this point given that the market has strong expectations for a Fed slowdown and even some cuts in the last quarter of the year it may take a very aggressive hawkish tone on behalf of Powell to actually reverse the expectations of the market. As for US stock markets we note that mixed signals were sent out as the week began yesterday, yet market focus may also be turning towards the earnings season which is about to begin at the end of the week.  On the international stage, the storm on Brazil\u2019s capital by supporters of former president Bolsonaro, seems to have had little if any effect in the markets as the situation came quickly under control and the momentum seems to have passed. Moving on to the far east, China\u2019s hasty reopening tended to create increased hopes in the market for an improved economic performance in the coming months as well as for a softening of the blow to the global economy. Overall the developments in China despite worries for a resurgence of the virus tended to improve the market sentiment as the performance of the Chinese economy seems to outweigh at the moment any worries about the virus, thus providing some support also for the Aussie. Moving north of the US border, the Canadian dollar seemed to have some slight gains against the USD reaching a one-month high, supported by the improved market sentiment yet also by a slight rise of WTI prices yesterday, while the acceleration of the building permits growth rate for November, tended to imply a wider degree of economic activity for the Canadian construction sector.<\/p>\n\n\n\n

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