Daily Market Recap - Surprising status quo against the Dollar, Yen moves lower

The picture on the Forex market today is quite striking, apart from the Yen which is weakening by -0.60% against the dollar and -0.40% against the Euro, no gap exceeds 0.10% on the main currency pairs.

The EURUSD is eroding by -0.10% towards the 1.207 marks, while the other gaps against the greenback are not even measurable (Pound, Swiss Franc, Canadian Dollar).

And yet, the day's figures were particularly robust in the United States: The Conference Board's consumer confidence index jumped more than 12 points, from 109 to 121.7 (one of the strongest month-over-month increases in history). The Richmond Fed manufacturing index rose to 17 points, signaling an improvement in the manufacturing sector.

An hour earlier, the Case Shiller index of real estate activity came in at +12% (versus +11.7% expected), again, accelerating sharply like the entire real estate sector since June 2020.

The Federal Reserve began two days of policy discussions today, at the end of which the institution will likely opt for a 'status quo.

The feeling is that Jerome Powell will have a hard time finding new arguments to 'enchant' the markets while his position on inflation (which is not and will not be a problem by the end of 2021) is already considered bold... but keeping rates low depends on it.

The Fed will probably wait to see employment and economic activity numbers recover to their pre-Covid-19 levels and a sustained improvement in the health environment before contemplating any adjustment in the rates.

(Chart Source: Tradingview 27.04.2021)

Meanwhile, on the other side of the Pacific, the Bank of Japan (BoJ) opted on Tuesday for the monetary status quo. “The BoJ still expects inflation to be well below its 2% target, which means the monetary policy will remain loose,” commented Lee Hardman, an analyst at MUFG.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.