Forex news for North American trade on April 28, 2021:
- FOMC statement highlights: Rates left unchanged, no change to QE, mild upgrade on economy
- Powell: A transitory rise above 2% inflation this year wouldn't meet standard of moderate overshoot
- Powell Q&A: It's unlikely we would see a persistent rise in inflation with significant slack in labor market
- The full FOMC statement from the April 2021 meeting
- Canada February retail sales +4.8% vs +4.0% expected
- US advance goods trade balance for March $-90.6 billion versus -$88.0 billion estimate
- SEC delays decision on VanEck bitcoin EFT filing until at least June
- EIA US weekly oil inventories +90K vs -450K expected
- ECB's Schnable: low profitability of eurozone banks has been a reason for concern for quite some time
- US March wholesale inventories +1.4% m/m vs +0.5% expected
Markets:
- Gold up $4 to $1780
- WTI crude up 82-cents to $63.77
- US 10-year yields down 1 bps to 1.61%
- NZD leads, USD lags
- S&P 500 down 3 points to 4181
The market began to sniff out a Fed that wouldn't be jarred from its dovish stance at the start of the day and that's exactly what happened. The dollar was modestly soft ahead of the Fed but tumbled afterwards, particularly after Powell said that it's not the time to start talking about a taper and that a transitory rise above 2% this year wouldn't meet the standard of a moderate overshoot this year.
With that EUR/USD rose to 1.2130 from 1.2080 before the FOMC and 1.2065 at the start of New York trade.
Cable joined the party as well, climbing 50 pips before running into offers just ahead of 1.3950.
The biggest movers were the commodity currencies as resource prices continued to rise and a moderate risk positive tone percolated. The loonie got a boost from a strong retail sales report for Feb and good advance numbers for March. That sent USD/CAD to a three-year low as it cruised below the March bottom and hit 1.2311.
On a percentage basis the kiwi did a bit better in a steady rally to 0.7265 but it sits just below the March high and 200 pips from the Feb top.
