Market report: USD drops to four week lows
The dollar dropped to four-week lows versus other major currencies yesterday. Treasury yields pulled back from last month’s surge and investors are increasingly convinced the US Federal Reserve will keep interest rates low for the foreseeable.
Many investors remain nervous the Fed could change its tone later this year. Especially if inflation readings swing much higher than expected. But for now they seem content to give them the benefit of the doubt.
Fed Chairman Jerome Powell further reiterated this stance yesterday in his speech at the Economic Club of Washington. He stated the Fed will reduce its monthly bond purchases before committing to a rate increase.
Sterling got a boost yesterday after the Office for National Statistics (ONS) revealed UK productivity rose by 0.4% last year. However, overall production fell by 10% due to the pandemic.
Despite this, yesterday’s release of February’s GDP reading showed a steady improvement in the nation’s economy despite lockdown.
12:30 – (USD) – US Retail sales
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