Daily Market Update

U.S. Dollar and other safe havens on the rise

February 07, 2023

The U.S. Dollar turned mixed after a three-day winning streak as markets await comments from Federal Reserve Chair Jerome Powell at noon today.


The Chair is widely expected to pare back analysis from his press conference following the FOMC meeting last week after the non-farm payrolls report released Friday morning blew growth expectations out of the water.Atlanta Fed president Raphael Bostic, speaking yesterday afternoon, stated that the report adding an additional 517,000 jobs to the US economy “would [likely] translate into [the Fed] raising interest rates more than I have projected right now.” Current projections for the Fed’s terminal interest rate have raised by a whopping 14 basis points since Friday, while expectations for cuts from July to December have dropped to 35 basis points total, down from 50.


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The Australian Dollar gained against the greenback this morning after the Royal Bank of Australia announced a 25-basis-point increase to the nation’s interest rate and warned that further tightening will be needed to bring inflation back into normal ranges.Governor Philip Lowe effectively ended the “pause narrative” previously embraced by the RBA and dispensed with previous statements that the bank was not on a pre-determined path on rates. In response to his hawkish statements, AUD erased losses incurred over the last three days.



EUR continued its slide from the last week and opened the daily session nearly half a percent lower, trading at the cheapest price in just under a month as of this morning. Lagarde’s dovish comments from last week have clearly had an impact on the single currency, especially when taken in conjunction with strong data and speeches out of the US. Other members of the ECB’s governing council have attempted to shift to a more hawkish stance than Lagarde put forth last week. France’s Francois Villeroy de Galhau stated that ultra-low interest rates are “a thing of the past” as the bank attempts to fight inflation throughout the region. German CPI data due out Thursday will likely provide the Eurozone with a clearer path forward.

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