Dollar surges on Mideast fears and hawkish Powell

Important news for the day

• Thu., 19th, 00:45 CET        NZ        Gross Domestic Product.
• Thu, 19th, 09:30 CET        CH        SNB Policy Rate.
• Thu, 19th, 13:00 CET        UK        Official Bank Rate.

US Fed

US officials still expect to cut rates twice this year. Yet they start to be divided with their actions. Seven lawmakers expect no rate cut for this year, which had been only four in March, while 10 officials now believe that at least two rate cuts are needed before the end of this year. Government actions in particular with the tariffs adding price pressures and the new spending bill, which adds more than USD 3.4 trillion in debt will harm the economy even more. Clearly the Dollar is gearing up steam for now as actions of the Fed remain unclear.

Market talk

Yesterday, the FOMC committee decided to leave rates unchanged as previously expected. The Dollar has hence continued with slight strength and equities started to correct further. With markets remaining under pressure also the AUDUSD currency pair shows that downside momentum might now be on the cards. The German DAX is trading right at the previous resistance level, which now offers support to the market. The slightly fading risk sentiment continues to also cause Bitcoin and other tokens to weaken. So far, though, the downside momentum has been limited. Today’s market opening in Europe might offer more clarity.

Tendencies in the markets

• Equities weaker, USD stronger, Bitcoin weaker, ETH weaker, oil positive, Silver weaker, Gold weaker, JPY weak.