The USD remains the weakest performer over the last 24 hours – the selloff was triggered by Fed Chairman Yellen’s dovish comments at the Economic Club of New York. She suggested that interest rate increases were likely to be less aggressive and still left the door open for further monetary easing. Her concerns over slowing Chinese and domestic growth, combined with lower inflation echoing those of other central banks that have expressed doubts about the health of the global economy.
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In the aftermath, all major currencies have rallied against the US Dollar – the Pound breaching 1.44, the Euro 1.13. Risk appetite has been buoyed with commodities, associated currencies and stock markets all gained. This afternoon’s US ADP employment report beat expectations slightly with 200k jobs created in the private sector in March, broadly in line previous months but the market is focusing on this Friday’s non-farm payrolls report and unemployment release – they’ll need to come in strongly to stem this Dollar selloff.
Latest FX news by Alastair Sweetman