US Dollar , S&P 500 , Gold Prices, Charts, and Analysis
- Equity markets turn positive for the session, erasing early losses.
- The US dollar continues to gain ground against a range of currencies,
Federal Reserve Rate Decision : FOMC Holds, Focus to March for Lift-Off
Risk markets are picking up a small in early trade in Europe as traders continue to digest Wednesday's hawkish FOMC meeting. Post-FOMC price action saw US equities give back all their gains, while Asian stock markets closed heavily in the red with the Nikkei over 3% lower on the day. The hefty losses seen in early European turnover are now being erased as risk markets pick up a bid ahead of the first look at US Q4 GDP at 13.30 GMT today.
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In the equity space, an early morning rally has seen most major indices pull back post-FOMC weakness with some now looking to turn positive for the session. The Nasdaq 100 is 0.1% to the good at 14,184 after touching a low of 13,870, the S&P 500 is flat at 4,345 after touching 4,270, while the FTSE 100 is trading at 7,485, flat on the day but up over 160 points from its nadir. As long as Monday's low prints hold, equity markets may move higher going into the weekend.
FTSE 100 Daily Price Chart – January 27, 2022
The US dollar remains bid in London, bolstered by a strong US Treasury set-up. The interest rate-sensitive UST 2-year now yields 1.20%, up nearly 18 basis points post-FOMC, while the benchmark UST 10-year is quoted with a yield of 1.85%. The market is now pricing in five 0.25% rate hikes in the US this year, a supportive backdrop for the US dollar.
UST 2-Year Yield Chart – January 27, 2022
The US dollar continues to run hot and is the driver behind most US dollar pairs. GBP/USD is trading around 1.3425, its lowest level this year, while EUR/USD is below 1.1200. If EUR /USD breaks below the late November low of 1.1182, the pair will be back at levels last seen in June 2020.
EUR/USD Daily Price Chart – January 27, 2022
In the commodity space, gold is coming under pressure and may well test $1,800/oz. in the near future, while oil remains bid on Russia/Ukraine political tension and is near its multi-year high. Gold remains within a basic trend channel, printing a series of short-term higher lows and higher highs, and will need to remain above $1,805/oz. if the precious metal is to push higher.
Gold Daily Price Chart – January 27, 2022
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