WikiFX report: Riskier assets rebound, USD eases as Fed’s Powell reiterates 50 bps rate hike call

Feds Powell is focusing more on price stability and warns of more than two 50 bps rate hikes this year. Federal Reserve Chair Jerome Powell reaffirmed that the central bank is likely to raise interest rates by a half percentage point at each of its next two meetings, while leaving open the possibility it could do more.

In a interview with the Marketplace public radio program, Powell made clear his determination to get inflation under control but conceded that the Feds ability to do that without triggering a recession may depend on factors outside its control.

The statement clears that investors should brace for at least more than two rate hikes by 50 bps this year. The price pressures are depreciating the paychecks of the households in the US and price stability is highly needed to stabilize the economy from inflationary shocks.

The risk-on mood helped trigger the US dollars pullback from the fresh 20-year high flashed on Friday, which in turn allowed gold and crude oil prices to recover. Further, Antipodeans cheer optimistic news from Shanghai and Beijing, in addition to the softer USD. Also Prices of BTCUSD and ETHUSD portray the biggest daily gains in over a week while equities in Asia-Pacific, as well as in Europe and the UK, print mild gains due to the positive risk profile.

Going forward, second-tier data may entertain traders but qualitative factors will be more important for clear directions.

Following is the list of major assets latest performances:

• Brent oil rises for the third consecutive day, up 0.80% around $108.50.

• Gold recovers from three-month low while grinding higher towards $1,830.

• USD Index retreats from 20-year high near 105.00 to retest 104.50.

• FTSE 100, DAX and EUROSTOXX50 all rise around 1.30% by the press time.

• Dow Jones dropped 0.33% but S&P 500 declined 0.13% whereas Nasdaq rose 0.06% on Thursday.

• BTCUSD and ETHUSD both add around 5.0% intraday while picking up bids near $30,200 and $2,050 respectively