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  • Mike Paterson

Greenback grabbed after hawkish FOMC

Thursday 27 January 2022

Yes folks, the US Federal Reserve continued to point to rate hikes in March and some analysts now pricing in a 0.5% to kick off with after the FOMC announcement and Powell presser last night.

Risk sentiment was initially wobbly as equities sold off yet again on the hawkish tones albeit with an understandably cautious nod to COVID but we've seen good two-way business since, and a rally again as I type, but the jury remains out. Notably constant though since the FOMC has been USD demand and that's seen some solid gains across the board. Oil too continues its surge higher to post 7-year highs.The BOC surprised a few hawks by leaving rates on hold but still pointing to hikes sooner rather than later.

GBPUSD: Broken down through the 1.3430-35 support but finding more demand into 1.3400 this morning. EURGBP: The old 0.8330-35 line now providing support but equally sellers now at 0.8360-65 and 0.8380 lurking amid he variable risk. Good two-way business expected still. GBPJPY: Support still at 153.80 but unable to hold through 154.60 as the jury remains out.

EURUSD: 1.1250-80 support now historyu amid the firmer USD and risk tones and now testing 1.1200 as I type. USDJPY: Seeing a test of 115.00 as I type amid the firmer USD and risk sentiment.EURJPY: 128.50-60 the support line again after failing into 129.20 amid the mixed risk plays. USDCHF: 0.9240 the initial support now amid firmer risk and USD tones and with SNB ever vigilant and now pushing up through 0.9270. EURCHF: That support line at 1.0360-70 still in place with SNB ever-present but EUR sellers remain poised on the firmer risk tones.

AUDUSD: Has shown its vulnerability and tumbled to test 0.7060 amid firmer USD but finding some AUDJPY support this morning as risk tones turn higher. USDCAD: BOC rate decision to stay on hold initially sent the pair up to 1.2650 but the hawkish tones overall saw it back down to 1.2580 just as quickly, helped by firmer oil CAD demand. Strong USD sentiment since FOMC though and mixed risk has seen a sharp rally to 1.2725 before falling back to 1.2670 as oil and risk turn higher again.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 08.43 GMT

GBPUSD 1.3430

EURUSD 1.1202

EURGBP 0.8338

GBPEUR 1.1992

GBPJPY 154.35

GBPCAD 1.7030

GBPCHF 1.2453

GBPZAR 20.4830

GBPHKD 10.4620

USDJPY 114.93

EURJPY 128.70

EURCHF 1.0377

EURHKD 8.7256

AUDUSD 0.7087

USDCAD 1.2684

USDCHF 0.9266

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