Dollar Index fluctuated up the implications of the policy shift. :
Global equities crept higher and Treasury yields rose on Thursday after Jay Powell, Federal Reserve chair, announced changes designed to give the central bank more flexibility on monetary policy. The S&P500 closed up 0.2 per cent having set a new intraday high above 3,500 points. Ten-year US yields rose to 0.75 per cent, up 0.06 percentage points in response to the Fed adopting a more flexible approach to managing inflation as it seeks to lift the world’s biggest economy out of recession.
Speaking at the virtual Jackson Hole central banking conference, Mr Powell said the Fed would shift its inflation target to an “average” of 2 per cent, something that would give the central bank the ability to let price growth move higher than that level for a time. The move was seen as the latest intervention to give policymakers room to keep stimulus measures in place even as inflation begins to pick up.
Markets fluctuated as traders weighed up the implications of the policy shift. Bonds and gold prices initially rallied after Mr Powell’s speech was published before turning lower, while the dollar flitted between gains and losses. Gold was 1.2 per cent lower at $1,929 a troy ounce by Wall Street’s close, having earlier risen as much as 1.1 per cent. The dollar index, a measure of the currency against its peers, was little changed.
TREND : BULLISH
Time : 28/08/2020
Pivot : 1.1841
Technical View : LONG ABOVE 1.1861
Target : 1.1881, 1.1935, 1.1985, 1.2064
Technical View : SHORT BELOW 1.1821
Target : 1.1801, 1.1766, 1.1697, 1.1637