Dovish Fed Drives USD Down; Lower Stockpiles Give Oil Prices a Boost
Published March 16, 2017
The US dollar saw large losses yesterday due to a dovish interest rate hike from Janet Yellen and the Federal Reserve
Interest rates moved to .75%- 1% as expected, however, the Fed showed little urgency for further monetary policy tightening
Janet Yellen offered fairly optimistic remarks on the US economy with special mentions of US inflation moving towards its 2% target, but market participants were disappointed that the Fed stuck to its projection of two more rate hikes this year and offered little change for 2017 and 2018 projections
USD/CAD moved down more than a cent yesterday as the US dollar sold off; recovering oil prices also helped the Canadian dollar make its largest one day gain in more than a year
Oil rose for the second day in a row today, supported by a draw down in US crude oil inventories; this was the first dip in inventories in more than 9 weeks as investors look to see if the OPEC cut can help sustain a consistent decrease in global oil supply
President Donald Trump released a “skinny budget” this morning, revealing a wish list of spending requests for Congress and economic projections from the White House; his budget laid out plans for increasing military spending while cutting foreign aid and domestic programs
Dutch voters rejected the Freedom Party’s pledges to exit the European Union and stop Muslim immigration; current Prime Minister Mark Rutte’s Liberal Party was projected to take 33 seats in the 150-seats versus 20 seats for the Freedom Party
