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Dollar the Clear Winner as Powell Put Forward for Second Term

CROSS ASSET
  • USD holding the entirety of the post-announcement gains, with EUR/USD slipping through last Friday's lows to print a fresh 2021 low. Gains also notable against the JPY, with USD/JPY now well clear of Y114.50 to narrow the gap with last week's YTD high of 114.97.
  • Gold has been sold aggressively, extending Monday's weakness to put the metal on course for a test of $1800 and the convergence of the 50-, 100- and 200-dmas at $1789.56 - $1793.92. These could act as solid support on approach.
  • Markets are erring hawkishly as analysts had speculated that Brainard could take a more dovish approach to policy, with markets correcting to adjust out the small odds that Brainard would be put forward as Chair.

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