CENTRAL BANK SPEAKERS DOMINATE FINANCIAL MARKET MOVES
FEDERAL RESERVE UNCHANGED
Federal Reserve Chairwoman Janet Yellen gave a speech in London on Tuesday, amidst persistent market concerns that U.S inflation is running below the Federal Reserve expectations for a 2% inflation rise.
Janet Yellen also answered questions from the audience and reiterated that rate increase will be gradual, and the Federal Reserve will avoid destabilizing financial markets.
Philadelphia Fed President Patrick Harker, also speaking in London, reaffirmed his stance for raising rate one more time this year.
DRAGHI SPEECH BOOSTS THE EURO
European Central Bank President, Mario Draghi sent the euro soaring against the U.S dollar this week, after delivering a hawkish speech on European monetary policy.
Speaking at the Central Bank forum in Sintra, Portugal, Mario Draghi said that changes to the central bank’s accommodative monetary policy, may soon see the ECB start to tighten, as the eurozone economy starts to recover. His speech was viewed as being less dovish, or accommodative than the ECB President's recent speeches.
The euro moved to 1.1445, as the EURUSD pair broke above the key 1.1300 technical level, and set a new ten month trading high for the single currency.
U.S POLITICAL UNCERTAINTY HURTS THE DOLLAR
A delay of the health-care bill vote by the U.S. Senate put further pressure on the greenback this week, as the U.S dollar index moved below the 97 level.
GOP lawmakers postponed the vote on the health-care bill to overhaul Obamacare, after several Republican senators said they would not vote for the bill in its existing form. The failure to pass the bill with enough support adds to U.S investors fears, that the Trump administration may not be able to pass future legislative reform.
The Bank of England Governor, Mark Carney, speaking at the Central Bank forum in Sintra, Portugal, delivered a shock to financial markets, when he said 'interest rates hikes are likely to become necessary'.
His comments provoked a sharp move higher in the British pound, as he appeared to contradict his previous comments on keeping U.K rates unchanged.
The British pound moved to a four week trading high against the U.S dollar, hitting 1.3030, and moving the pair ever closer to the 2017 trading high, at 1.3048.