The Federal Reserve kept the interest rate at 4.25-4.5% unchanged at its March meeting overnight. Meanwhile, the dot plot still indicates there are two potential rate cuts in 2025. Powell’s stance in the post-meeting statement was neutral with a hint of firmness, but this still failed to help the US dollar consolidate its rebound momentum.
Federal Reserve Chair Jerome Powell played down concerns about economic growth and the impact of President Trump’s trade war on inflation, saying the inflationary effects were “transitory”. Powell’s remarks and the median forecast should help ease concerns that inflationary pressures would prevent the central bank from cutting interest rates if the economy weakens.
After the Federal Reserve meeting, the US dollar retreated from around 103.90 back to the vicinity of 103.30.
In the Asia-Pacific market last year, Australia’s employment unexpectedly declined in February, causing the currency and government bond yields to fall as traders increased their bets on further interest rate cuts this year.
Data released by the government on Thursday showed that 52,800 jobs were lost, mainly full-time positions, while 30,000 new jobs were expected. The unemployment rate remained at 4.1%, reflecting a decline in the labor force participation rate.
The pound fell as traders increased their bets on a near-term rate cut and that the easing cycle would continue until 2026, while the yield on the three-year bond, which is sensitive to policy, extended its earlier decline.
NAB strategist Rodrigo Catril said, “The Australian dollar has declined due to the headlines, but from a policy perspective, the RBA is unlikely to be influenced by the data.” He pointed out that the unemployment rate remains at 4.1%, and the central bank expects it to reach 4.2% in June this year.
The money market now sees a roughly 77% chance of the Reserve Bank of Australia cutting interest rates in May, up from a 50-50 prediction before the report. Traders also fully expect the RBA to cut rates twice more before the first quarter of 2026, up from about an 80% probability before the jobs report.
The weak labor market is a difficult period for Prime Minister Anthony Albanese’s Labor government as it prepares for the election in mid-May. The opposition Liberal-National coalition has a slight edge in the polls, and the government has been blamed for the rise in living costs over the past few years due to high inflation and rising borrowing costs.
“Today’s figures show some expected softening in the labour market,” said Treasurer Jim Chalmers. “While our economy still faces challenges and people are still under pressure, our average unemployment rate remains the lowest of any government in the past 50 years.”
Over the past few years, Australia’s job market has maintained remarkable resilience, weathering the impacts of rising borrowing costs and economic weakness.
Technical analysis:
Gold: The overnight Fed meeting did not disrupt gold’s recent strong performance. Whether it’s inflation or uncertainty remarks, they are all favorable factors for gold. The key yellow zone we alerted yesterday through the plugin continues to serve as support for the gold price. For today, we maintain the buy operation after a pullback and also keep an eye out for the signal of a momentum break. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
The Nasdaq: The Fed maintained the possibility of two more rate cuts in 2025, providing some relief to the market. The price center is gradually starting to shift upward. Today, we continue to monitor the support level near 19,800 for any pullback, looking for 1-2 buying opportunities. If there are signs of upward momentum at the opening of the North American market, we can also consider 1-2 buying opportunities. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Crude oil: The buy stop operation we were alerted to in the plugin yesterday was very effective. For today, priority should be given to protecting profits. Then, continue to monitor the signal of the price breaking through the momentum near 67.50, and you can make 1-2 attempts. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V:Hana-fgfg.
Today’s key financial data and events to focus on:
19:00 UK March CBI Industrial Order Expectations Diff.
20:00 Official Bank Rate of the United Kingdom
20:30 U.S. Seasonally Adjusted Initial Jobless Claims (in thousands) for the Previous Week
20:30 Philadelphia Fed Manufacturing Index for March in the US
22:00 US NAR Existing Home Sales (Annualized MoM Rate) for February (Seasonally Adjusted)
