USD turned dramatically higher against major and minor currencies after the shift in stance on inflation by the Fed. The fallout from the Federal Open Market Committee (FOMC) meeting has reset the financial markets on a grand scale. With the majority of FOMC members now expecting there to be at least two increases in interest rates before the end of 2023 and talk of starting to rein back its $120 billion a month asset purchases, the impact across all markets has been immense if not immediate. And as far as asset purchase tapering went, Fed Chairman Jerome Powell made a pretty big hint, remarking: “You can think of this meeting that we had as the ‘talking about talking about’ meeting, if you’d like.” From forex to equities – risk-off is back Initially the stock market was fairly measured but by the end of the week the reflation trade was looking like it was on its last legs, if not entirely dead. The Dow was down 1.6% and the UK FTSE 100 1.9% – both underperforming other stock indices because of their preponderance of value stocks. Bond markets at the shorter end of the curve reacted with yields rising on Wednesday’s shift in policy from the FOMC. The restrained nature of the bond selling at first gave the impression there would be no repeat of the panic-selling in the so-called taper tantrum of 2013 – the last time when the Fed hinted at a more hawkish posture on monetary policy. Get Coin Signals! But that didn’t last and on Thursday the bond markets saw buyers return and yields fall back. The 10-year Treasury the most closely watched because of its influence on borrowing costs globally – 6 basis points to 1.51%, while the 30-year dropped 10 basis point to 2.1%. However, at the shorter-end of the curve, the two-year maintained the upward momentum in yields, up 1 basis point to 0.21%. In the currency markets the reaction was at its most severe. DXY makes its move The dollar index (DXY) made two large upward moves on Wednesday and Thursday of 0.6% and 0.86% respectively. That, taken together, was the largest move of the greenback against the other major internationally traded currencies this year. Both the euro and the pound lost ground to the dollar, but so too did a host of other countries’ currencies, notably in Asia. Until this week the dollar had been weakening over the past 12 months, aside from some appreciation seen in March. But the Fed’s definite move to indicate to markets that it was aware of inflation expectations rising and what this could be saying about an overheating economy, both at home and abroad. The fact that the Fed has shifted from the assessment that the increase in inflation was transitory has signalled to the equities market that valuations are surely too rich, given the negative implications for future corporate earnings. Not surprisingly, then, US stocks has their worst week since November last year. USD strengthens, commodities drop Commodities have also taken a hit from the stronger dollar. Those commodities priced in the USD become more expensive. For now oil is immune, and its price continues to benefit from the prospect of Iranian oil being kept off the market as the prospect of nuclear talks leading to the lifting of sanctions dissipates. It was a different story for metals such as copper however, which gave up a lot of their most most recent gains. The decision of the Chinese government to release some of its strategic reserves in an attempt to put a lid on metal price inflation added to bearishness in commodity market. But back with currencies, the most significant repercussions could be for the carry trade between emerging market currencies in the Far East and the dollar. The appreciation in the dollar squeezes the profit opportunities as the spread between the interest rates of, for example, the Korean Won (KRW) and the US dollar narrows. KRW snapped a five-day winning run to see its biggest fall against the dollar since February. The Chinese Renminbi also dropped. The Japanese Yen was an exception, benefiting from its safe haven status. With no major economic calendar events in the US, market participants will be on Fed watch. Bullard sees interest rate rise earlier – 2022 On Friday St. Louis Federal Reserve President James Bullard told CNBC the economy was in a good place, but that came with a caveat. “We’re expecting a good year, a good reopening. But this is a bigger year than we were expecting, more inflation than we were expecting. I think it’s natural that we’ve tilted a little bit more hawkish here to contain inflationary pressures.” Bullard went on to explain that he expects inflation to be 3% this year and falling to 2.5% in 2022 before it returns to the Fed’s 2% target. The Fed had previously said that it would be relaxed about inflation remaining above the target level, provided it wasn’t for an extended period. Bullard added, though, that with inflation above target he thinks there should be an interest rate increase as early as next year. Bullard is not currently a voting member of the FOMC, but he is next year. It was only in March that the FOMC had said inflation would run at 2.2% this year – it has now revised that upwards to 3.0%. The economy is also hotter than it had previously expected. It now expects the GDP to be 7.0%, not the 6.5% it pencilled a month ago. In December the FOMC though had GDP would be 4.2% this year. If you are looking to profit from forex markets, then look out for our free forex signals next week. Get Free Crypto Signals – 82% Win Rate! Get Coin Signals! 3 Free Crypto Signals Every Week – Full Technical Analysis Forex Week Ahead 21 June to 25 June – Economic Calendar Check out our live calendar page here MONDAY, JUN 21 Consensus Previous 00:01 GBP Rightmove House Price Index (MoM) (Jun) 1.8% 00:01 GBP Rightmove House Price Index (YoY) (Jun) 2.1% 02:30 AUD Retail Sales s.a. (MoM) (May)Preliminar 0.7% 1.1% 02:30 CNY PBoC Interest Rate Decision 3.85% 24h ARS Martin Miguel de Guemes day 08:00 EUR Industrial Production (YoY) (Apr) 12.7% 09:00 PLN Industrial Output (YoY) (May) 29.0% 44.5% 09:00 PLN Producer Price Index (YoY) (May) 6.0% 5.3% 09:00 CZK Foreign Debt (Q1) 163.88B 10:00 EUR Consumer Confidence Index (Jun) 4 n/a EUR German Buba Monthly Report n/a INR Trade Deficit – RBI (Q1) -34.5B n/a INR M3 Money Supply (May 31) 10.0% 9.9% n/a INR Balance Payment $ (Q1) $32.5B n/a INR Current Account Balance $ (Q1) $-1.7B 13:30 EUR ECB’s President Lagarde speech 13:30 USD Chicago Fed National Activity Index (May) 0.24 13:30 BRL Current Account (May) $5.663B 14:00 EUR Leading Indicator (Jun) 6.5 15:00 EUR ECB’s President Lagarde speech 16:30 USD 3-Month Bill Auction 0.025% 16:30 USD 6-Month Bill Auction 0.04% 20:00 USD Fed’s Williams speech 22:00 KRW Producer Price Index Growth (MoM) (May) 0.2% 0.6% 22:00 KRW Producer Price Index Growth (YoY) (May) 6.0% 5.6% 22:00 NZD Westpac Consumer Survey (Q2) 99.5 105.2 TUESDAY, JUN 22 04:00 NZD Credit Card Spending (YoY) (May) 70.2% 87.4% n/a EUR Consumer Spending Volume (Apr) -0.4% n/a EUR Consumer Confidence Adj (Jun) -9 06:00 EUR Unemployment Rate (Mar) 7.6% 07:00 DKK Consumer Confidence (Jun) 2.8 07:00 GBP Public Sector Net Borrowing (May) £30.962B 08:00 TRY Consumer Confidence (Jun) 77.3 08:30 SEK Unemployment Rate (May) 9.4% 09:00 PLN Retail Sales (YoY) (May) 16.0% 25.7% 09:00 EUR Industrial Sales n.s.a. (YoY) (Apr) 25.8% 38.1% 09:00 EUR Industrial Sales s.a. (MoM) (Apr) 1.3% 1.6% 09:30 HKD Consumer Price Index (May) 0.6% 0.7% n/a EUR Current Account Balance (Apr) €-0.473B 13:00 HUF MNB Interest Rate Decision 0.85% 0.60% 13:55 USD Redbook Index (YoY) (Jun 18) 16.4% 15:00 USD Existing Home Sales (MoM) (May) 5.71M 5.85M 15:00 USD Existing Home Sales Change (MoM) (May) -2.7% 15:00 EUR ECB’s Lane speech 15:00 EUR Consumer Confidence (Jun)Preliminar -2.9 -5.1 15:00 USD Richmond Fed Manufacturing Index (Jun) 18 16:00 COP Trade Balance (Apr) $-1.298M 18:00 USD 2-Year Note Auction 0.152% 18:30 EUR ECB’s Schnabel speech 19:00 USD Fed’s Chair Powell testifies 21:30 USD API Weekly Crude Oil Stock (Jun 18) -8.537M WEDNESDAY, JUN 23 00:00 AUD Commonwealth Bank Composite PMI (Jun)Preliminar 58 00:00 AUD Commonwealth Bank Manufacturing PMI (Jun)Preliminar 60.4 60.4 00:00 AUD Commonwealth Bank Services PMI (Jun)Preliminar 58.3 58.0 00:50 JPY BoJ Monetary Policy Meeting Minutes 01:30 JPY Jibun Bank Manufacturing PMI (Jun)Preliminar 53 06:00 SGD Consumer Price Index (YoY) (May) 2.0 2.1 06:00 JPY Leading Economic Index (Apr) 103 103 06:00 JPY Coincident Index (Apr) 95.5 95.5 08:00 EUR Non-Monetary Policy ECB Meeting 08:15 EUR Markit Manufacturing PMI (Jun)Preliminar 59.0 59.4 08:15 EUR Markit Services PMI (Jun)Preliminar 59.4 56.6 08:15 EUR Markit PMI Composite (Jun)Preliminar 59.3 57.0 08:30 EUR Markit Manufacturing PMI (Jun)Preliminar 63.0 64.4 08:30 EUR Markit PMI Composite (Jun)Preliminar 57.4 56.2 08:30 EUR Markit Services PMI (Jun)Preliminar 55.5 52.8 08:30 EUR ECB’s De Guindos speech 09:00 ZAR Consumer Price Index (MoM) (May) 0.1% 0.7% 09:00 ZAR Consumer Price Index (YoY) (May) 5.2% 4.4% 09:00 EUR Markit PMI Composite (Jun)Preliminar 58.7 57.1 09:00 EUR Markit Manufacturing PMI (Jun)Preliminar 62.1 63.1 09:00 EUR Markit Services PMI (Jun)Preliminar 57.6 55.2 09:30 GBP Markit Services PMI (Jun)Preliminar 63.0 62.9 09:30 GBP Markit Manufacturing PMI (Jun)Preliminar 64.0 65.6 12:00 MXN Retail Sales (MoM) (Apr) 3.6% 12:00 MXN Retail Sales (YoY) (Apr) 2.5% 12:00 USD MBA Mortgage Applications (Jun 18) 4.2% 13:30 USD Current Account (Q1) $-189.9B $-188.5B 13:30 CZK CNB Interest Rate Decision 0.50% 0.25% 13:30 CAD Retail Sales ex Autos (MoM) (Apr) 2.2% 4.3% 13:30 CAD Retail Sales (MoM) (Apr) -5.1% 3.6% 14:00 CHF SNB Quarterly Bulletin (Q2) 14:10 USD Fed’s Bowman speech 14:45 USD Markit Manufacturing PMI (Jun)Preliminar 61.5 62.1 14:45 USD Markit Services PMI (Jun)Preliminar 70.0 70.4 14:45 USD Markit PMI Composite (Jun)Preliminar 68.7 15:00 USD New Home Sales (MoM) (May) 0.870M 0.863M 15:00 USD New Home Sales Change (MoM) (May) -5.9% 15:30 USD EIA Crude Oil Stocks Change (Jun 18) -7.355M 17:00 RUB Industrial Output (May) 10.5% 7.2% 18:00 USD 5-Year Note Auction 0.788% 19:00 EUR ECB’s President Lagarde speech n/a ARS Gross Domestic Product (YoY) (Q1) -4.3% 21:30 USD Fed’s Rosengren speech 22:00 KRW Consumer Sentiment Index (Jun) 103.6 105.2 THURSDAY, JUN 24 00:50 JPY Corporate Service Price Index (YoY) (May) 0.9% 1.0% 00:50 JPY Foreign Investment in Japan Stocks (Jun 18) ¥-33.2B 00:50 JPY Foreign Bond Investment (Jun 18) ¥410.6B 24h EUR European Council Meeting 06:00 EUR Producer Price Index (YoY) (May) 8.7% 24h EUR Export Prices (YoY) (May) 9.4% 06:00 EUR Import Prices (YoY) (May) 12% n/a EUR Gross Domestic Product n.s.a (YoY) (Q1) -2.8% n/a EUR Gross Domestic Product s.a (QoQ) (Q1) -0.5% -0.5% 07:00 EUR Import Price Index (MoM) (May) 1.4% 07:00 EUR Import Price Index (YoY) (May) 11.3% 10.3% 07:30 HUF Current Account Balance (QoQ) (Q1) 0.184 07:45 JPY BoJ’s Governor Kuroda speech 07:45 EUR Business Climate in Manufacturing (Jun) 107 08:00 TRY Capacity Utilization (Jun) 75.3% 08:00 TRY Manufacturing Confidence (Jun) 110.3 08:00 EUR Gross Domestic Product (YoY) (Q1) -9.1% -4.3% 08:00 EUR Gross Domestic Product (QoQ) (Q1) -0.5% -0.5% 08:30 SEK Producer Price Index (MoM) (May) 1.7% 08:30 SEK Producer Price Index (YoY) (May) 5.6% 09:00 PLN Unemployment (MoM) (May) 6.1% 6.3% 09:00 EUR IFO – Business Climate (Jun) 100.4 99.2 09:00 EUR IFO – Expectations (Jun) 103.5 102.9 09:00 EUR IFO – Current Assessment (Jun) 97.8 95.7 09:00 EUR Economic Bulletin 10:30 ZAR Producer Price Index (MoM) (May) 0.3% 0.7% 10:30 ZAR Producer Price Index (YoY) (May) 7.3% 6.7% 12:00 GBP BoE Interest Rate Decision 0.1% 0.1% 12:00 GBP BoE Asset Purchase Facility £895B £895B 12:00 GBP Monetary Policy Summary 12:00 GBP BoE MPC Vote Cut 0 0 12:00 GBP BoE MPC Vote Unchanged 9 9 12:00 GBP BoE MPC Vote Hike 0 0 12:00 GBP Bank of England Minutes 12:00 MXN 1st half-month Core Inflation (Jun) 0.33% 12:00 MXN 1st half-month Inflation (Jun) -0.01% 12:35 EUR ECB’s Panetta speech 13:00 PLN M3 Money Supply (YoY) (May) 9.1% 11.2% 13:30 USD Continuing Jobless Claims (Jun 11) 3.518M 13:30 USD Initial Jobless Claims 4-week average (Jun 18) 395K 13:30 USD Initial Jobless Claims (Jun 18) 380K 412K 13:30 USD Gross Domestic Product Annualized (Q1) 6.4% 6.4% 13:30 USD Gross Domestic Product Price Index (Q1) 4.3% 4.3% 13:30 USD Wholesale Inventories (May)Preliminar 0.8% 13:30 USD Goods Trade Balance (May)Preliminar $-86.7B 13:30 USD Personal Consumption Expenditures Prices (QoQ) (Q1) 3.7% 13:30 USD Core Personal Consumption Expenditures (QoQ) (Q1) 2.5% 2.5% 13:30 USD Durable Goods Orders ex Transportation (May) 0.8% 1.0% 13:30 USD Durable Goods Orders ex Defense (May) 0% 13:30 USD Nondefense Capital Goods Orders ex Aircraft (May) 2.2% 13:30 USD Durable Goods Orders (May) 1.9% -1.3% 14:00 RUB Central Bank Reserves $ $604.8B 15:30 USD EIA Natural Gas Storage Change (Jun 18) 16B 16:00 USD Fed’s Williams speech 16:00 USD Kansas Fed Manufacturing Activity (Jun) 32 16:30 EUR ECB’s Schnabel speech 16:30 USD 4-Week Bill Auction 0.045% 18:00 USD 7-Year Note Auction 0% 20:00 ARS Unemployment Rate (QoQ) (Q1) 11% 20:00 MXN Central Bank Interest Rate 4% 21:30 USD Bank Stress Test Info 22:00 KRW BOK Manufacturing BSI (Jul) 99 98 24h EUR Midsummer’s Eve 24h SEK Midsummer ´s Eve 23:45 NZD Imports (May) $4.98B 23:45 NZD Exports (May) $5.37B 23:45 NZD Trade Balance NZD (YoY) (May) $0.73B 23:45 NZD Trade Balance NZD (MoM) (May) $388M FRIDAY, JUN 25 00:01 GBP GfK Consumer Confidence (Jun) -7 -9 00:30 JPY Tokyo CPI ex Fresh Food (YoY) (Jun) -0.1% -0.2% 00:30 JPY Tokyo Consumer Price Index (YoY) (Jun) -0.6% -0.4% 00:30 JPY Tokyo CPI ex Food, Energy (YoY) (Jun) -0.1% -0.1% 24h EUR European Council Meeting 06:00 SGD Industrial Production (MoM) (May) 1% 06:00 SGD Industrial Production (YoY) (May) 2.1% 07:00 EUR Gfk Consumer Confidence Survey (Jul) -4 -7 07:00 DKK Retail Sales (YoY) (May) 9.8% 09:00 EUR Business Confidence (Jun) 112.0 110.2 09:00 EUR Consumer Confidence (Jun) 112.0 110.6 09:00 EUR M3 Money Supply (3m) (May) 10.5% 09:00 EUR Private Loans (YoY) (May) 4.1% 3.8% 09:00 EUR M3 Money Supply (YoY) (May) 8.5% 9.2% 10:00 EUR Trade Balance non-EU (May) €4.85B 10:30 EUR Consumer Price Index (MoM) (Jun) 0.15% 10:30 EUR Consumer Price Index (YoY) (Jun) 1.46% n/a INR FX Reserves, USD (Jun 14) $608.08B 13:00 GBP BoE Quarterly Bulletin (Q2) 13:30 USD Personal Spending (May) 0.4% 0.5% 13:30 USD Core Personal Consumption Expenditures – Price Index (YoY) (May) 3.5% 3.1% 13:30 USD Personal Income (MoM) (May) -2.0% -13.1% 13:30 USD Personal Consumption Expenditures – Price Index (MoM) (May) 0.3% 0.6% 13:30 USD Personal Consumption Expenditures – Price Index (YoY) (May) 4.0% 3.6% 13:30 USD Core Personal Consumption Expenditures – Price Index (MoM) (May) 0.6% 0.7% n/a EUR Current Account Balance EUR (Apr) €265B 15:00 USD Michigan Consumer Sentiment Index (Jun) 86.4 86.4 18:00 USD Baker Hughes US Oil Rig Count 373 18:00 USD Fed’s Rosengren speech 20:30 USD CFTC S&P 500 NC Net Positions 20:30 JPY CFTC JPY NC Net Positions 20:30 USD CFTC Oil NC Net Positions 20:30 USD CFTC Gold NC Net Positions 20:30 GBP CFTC GBP NC Net Positions 20:30 AUD CFTC AUD NC Net Positions 20:30 EUR CFTC EUR NC Net Positions 24h EUR Midsummer day Get Free Crypto Signals – 82% Win Rate! Get Coin Signals! 3 Free Crypto Signals Every Week – Full Technical Analysis Gary McFarlane Gary McFarlane Gary was the production editor for 15 years at highly regarded UK investment magazine Money Observer. He covered subjects as diverse as social trading and fixed income exchange traded funds. Gary initiated coverage of bitcoin and cryptocurrencies at Money Observer and for three years to July 2020 was the cryptocurrency analyst at the UK’s No. 2 investment platform Interactive Investor. In that role he provided expert commentary to a diverse number of newspapers, and other media outlets, including the Daily Telegraph, Evening Standard and the Sun. Gary has also written widely on cryptocurrencies for various industry publications, such as Coin Desk and The FinTech Times, City AM, Ethereum World News, and InsideBitcoins. Gary is the winner of Cryptocurrency Writer of the Year in the 2018 ADVFN International Awards. View All Post By Gary McFarlane Daily LookForex News Today: Daily Trading NewsMajorsUS Dollar ForecastWeekly Forex Forecasts share Read Next Breaking: Bitcoin breaks below $34,000 while accurate indicator screams buy FX Street 10 months USD turned dramatically higher against major and minor currencies after the shift in stance on inflation by the Fed. The fallout from the Federal Open Market Committee (FOMC) meeting has reset the financial markets on a grand scale. With the majority of FOMC members now expecting there to be at least two increases in interest rates before the end of 2023 and talk of starting to rein back its $120 billion a month asset purchases, the impact across all markets has been immense if not immediate. And as far as asset purchase tapering went, Fed Chairman Jerome Powell made a… Top Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.