Stocks Rise, Dollar Drops as Fed Signals Peak Rates; Currencies and Metals Positioned to Benefit
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U.S. Treasury yields plummeted last week after Fed Chair Powell failed to redirect investors toward further tightening. This sent the dollar lower and major currency pairs like EUR/USD higher.
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With sentiment recovering and signs recession isn't imminent, stocks may continue to rise in the near-term. Gold was subdued, unable to benefit from weaker dollar and lower yields.
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Several Fed members, including Powell, will speak this week. Dovish comments could weigh on yields and the dollar, supporting stocks and metals.
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GBP/USD reversed higher after US jobs data signaled interest rates have peaked. RBA decision on Tuesday could further boost AUD/USD.
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USDJPY rose as weaker dollar offset BoJ policy tweak. EUR/USD rallied on reduced likelihood of further US rate hikes after jobs data.