- Fed head Yellen: Caution in raising rates is warranted
- U.S. CB consumer confidence index up from 94.0 to 96.2 in Mar
- Canada’s raw materials price index down by 2.6% vs. projected 0.8% drop
- Canadian industrial product price index down by 1.1% vs. estimated 0.2% dip
The Greenback was in a weak spot against its forex trading rivals when Fed head honcho Janet Yellen reiterated her dovish bias, downplaying the hawkish vibes from other FOMC members’ speeches.
Yellen’s testimony – The Fed Chairperson was her usual cautious self during her speech in New York, citing that only gradual increases in interest rates might be seen in the next few years. She added that caution in tightening monetary policy is “especially warranted” and that “even if the federal funds rate were to return to near zero, the FOMC would still have considerable scope to provide additional accommodation.” Yikes!
Yellen explained that inflation expectations have drifted lower recently and that the global economic slowdown continues to pose risks. Still, she noted that employment and domestic spending have been strong but that there’s plenty of room for uncertainty.
Canada’s leading inflation indicators – Elsewhere in North America, economic data hasn’t turned out so well as Canada printed a couple of disappointing inflation indicators. Its raw materials price index, which accounts for the prices that manufacturers pay for goods, slumped 2.6% versus the projected 0.8% decline. Meanwhile, its industrial product price index chalked up a 1.1% decline instead of the estimated 0.2% dip.
Major Currency Movers:
USD – The U.S. dollar was forced to return some of its recent wins upon hearing Yellen’s downbeat remarks. USD/JPY found resistance around 113.80 then fell to 112.50, EUR/USD made its way up to the 1.1300 handle, GBP/USD bounced off a low of 1.4260 to the 1.4400 mark, and USD/CHF retreated to a low of .9665.
Watch Out For:
- 11:50 pm GMT: Japanese preliminary industrial production (-5.8% expected, +3.7% previous)
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!