LIVEUS Dollar Remains Weak, Gold and Bitcoin Eye Fresh Highs as US NFPs Near
2024-03-08 09:03:50
US DOLLAR, GOLD, AND BITCOIN ANALYSIS, PRICES, AND CHARTS
Fed and ECB are confident, but not confident enough yet to start cutting rates.
Gold continues to rally, Bitcoin primed for another ATH
US NFPs the next driver of price action.
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In his testimony to the Senate Banking Committee yesterday, Fed Chair Jerome Powell indicated that interest rates could soon be on the way down.
‘If the economy does as expected, we think carefully removing the restrictive stance of policy will begin over the course of the year’, Powell said Thursday.
He added ‘I think we are in the right place…We are waiting to become more confident that inflation is moving sustainably down to 2%. When we do get that confidence, and we’re not far from it, it will be appropriate to begin to dial back the level of restriction so that we don’t drive the economy into recession.’
Earlier in the session yesterday, the European Central Bank kept all monetary policy settings unchanged as expected, but staff projections revised inflation and growth forecasts lower. Speaking at the press conference after the decision, ECB President Christine Lagarde also gave a small nudge that rate cuts are on the horizon.
‘We are making good progress towards our inflation target and we are more confident as a result…But we are not sufficiently confident. We need clearly more evidence and more data. We will know a little more in April, but we will know a lot more in June.’
Financial markets are now fully pricing in a 25bp ECB rate cut at the June 6th meeting, while the probability of a similar-sized Fed rate at the June 12th FOMC meeting is in the mid-high 70% area.
This firming of upcoming rate cuts by the Fed has continued to push the US dollar lower. After posting a multi-week high of 105.02 on February 14th, the US dollar index has fallen steadily to a near-two-month low of 102.85.
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