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Foreign exchange trading reminder: the Federal Reserve hinted that it would not consider a larger interest rate hike, the US dollar fell sharply, and the Australian dollar soared

发布时间：2022-08-25 浏览：114

On Wednesday (May 4), the dollar index fell 0.95% to 102.50, the largest intraday decline since March 9; The yield of U.S. 10-year Treasury bonds fell by 5 basis points, and the yield curve became steeper. After the Federal Reserve raised interest rates by the largest margin in 20 years, Powell eased the market's concern that the Federal Reserve would adopt a more aggressive tightening pace.

Powell said at the press conference held after the Fed issued its policy statement that the Fed did not actively consider raising interest rates by 75 basis points, but should consider raising interest rates by another 50 basis points at the next few meetings.

Previously, the Federal Reserve raised its benchmark overnight interest rate by 50 basis points, the largest increase in interest rates in 22 years. The market is generally expected that the Federal Reserve will make this decision.

Mazen Issa, senior foreign exchange strategist at Dow Jones securities in New York, said that the market believed that before July, between June and July, the possibility of raising interest rates by 75 basis points was basically 50/50. The most important point is that the market is very concerned about whether the increase of 75 basis points is within the scope of consideration, and Powell basically eliminated this possibility. After Powell's speech, the dollar index fell sharply, breaking the low of nearly a week to 102.45.

The Federal Reserve also said that it would allow its balance sheet size of $9trillion to be reduced by $47.5 billion per month in June, July and August, and that the scale of reduction starting in September would increase to a maximum of $95billion per month.

Investors have been evaluating whether there is further room for the rally that pushed the US dollar index to its highest level in 20 years last week, at least in the short term,

Because the market has digested most of the hawkish attitude of the Federal Reserve.

However, the Fed is expected to tighten policy more than other central banks. Take Europe as an example. Due to the sanctions against Russia, the economic growth in Europe slowed down and the energy supply was interrupted.

The euro rose 0.94% against the US dollar to 1.0617, hitting its lowest level of $1.0470 since January 2017 on Thursday. Sterling rose 1.14% against the US dollar to 1.2634, a new high since April 26.

The Australian dollar rose more than 2% against the US dollar; The RBA unexpectedly raised its benchmark overnight call rate by 25 basis points to 0.35% on Tuesday, the first interest rate hike in more than a decade. The bank also said that with the end of the epidemic stimulus measures, there will be more interest rate hikes.

Thursday outlook

19: 00 Bank of England announces interest rate resolution and meeting minutes

19: 30 Bank of England governor Bailey held a press conference on monetary policy

The 28th ministerial meeting between OPEC and non OPEC oil producing countries was held 4

Summary of institutional views on the Fed resolution and Powell's speech

Michael Brown, director of market intelligence at Caxton: it is expected that the Federal Reserve will raise interest rates by 50 basis points for the first time since 2000. Surprisingly, Brad, the super hawk, did not vote for a larger interest rate increase;

FOMC also hinted that it would actively raise interest rates further and reiterated its willingness to raise interest rates to a neutral level as soon as possible; But the market has digested the sharp interest rate hike, and the threshold for the hawks of the Federal Reserve has been very high.

Therefore, although the decision of the Federal Reserve itself is hawkish, compared with the high expectations of the market, this decision is somewhat mild, which leads to a rebound in risky assets and a weakening of the US dollar. This is a typical fact of buying and selling expectations, and also stimulates the demand for US Treasury bonds.

Nolte, portfolio manager of kingsview asset management company: Overall, the market situation is consistent with expectations. The Fed did not act more hawkish than expected. The Fed is taking a neutral position, and there is no accident in shrinking the table, which is acceptable to the market.

Hogan, chief market strategist of national securities: the U.S. stock market is expected to fluctuate. The direct reaction of the market is that inflation is very surging, and today's is no exception. On the whole, the information conveyed by FOMC is very consistent with the consensus. The news that the Federal Reserve has not raised interest rates by 75 basis points may be beneficial to the market.

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Michael Brown, head of market intelligence at Caxton, a hedge fund in London: the Federal Reserve also sent a signal of further positive interest rate hikes, reiterating its recently expressed desire to raise interest rates to neutral levels as soon as possible.

However, given that the market has digested a lot of expectations of interest rate hikes, the threshold for hawks to surprise is always high.

Peter Yi, director of Northern Trust asset management: This fed meeting is a little boring. There is nothing too surprising. The Federal Reserve has really lived up to market expectations.

There are rumors that the interest rate may be increased by 75 basis points this time, because St. Lewis Fed chairman Brad has repeatedly hinted that it may be more radical than 50 basis points.

The most interesting thing is that policy makers have no objection to the decision of this meeting and agree unanimously. Almost all the actions of the Federal Reserve have been digested,

It seems that nothing in the policy statement should surprise investors.