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Federal Reserve Board Governor Bowmans speech will be released in ten minutes.French President Emmanuel Macron stated: "We will continue to firmly support Ukraine. Ukraines future cannot be forged without the participation of the Ukrainian people. Europe must also be involved in developing a solution. We will continue to coordinate closely with Zelenskyy and our European partners."SpaceX: The Dragon spacecraft has been confirmed to have splashed down.On August 9th, European powers and Ukraine responded to Russian President Vladimir Putins ceasefire plan on Saturday with a counter-proposal, which they said must serve as a framework for progress in upcoming talks between Trump and Russian leaders, according to two European officials familiar with the negotiations. Europe rejected Russias proposal that Ukrainian troops withdraw from the remaining areas of Donetsk in exchange for a ceasefire. The European proposal included a requirement for a ceasefire before any other steps could be taken. It also stated that territorial exchanges could only be made on a "reciprocal" basis, meaning that if Ukraine withdraws from certain areas, Russia must withdraw from others. "You cant start a (peace) process by ceding territory in the middle of a battle," said a European negotiator. Crucially, the European plan presented to U.S. Vice President Cyril Vance and others also stipulated that any territorial concessions from Kyiv must be backed by absolutely reliable security guarantees—including the possibility of Ukraine joining NATO.The European proposal includes a ceasefire before any other steps can be taken. It also says territorial swaps can only be done on a "reciprocal" basis, meaning that if Ukraine withdraws from some areas, Russia must withdraw from others.

US Dollar Index Recovers From Weekly Low Due To Weak US Inflation And Hawkish Federal Reserve Bets

Daniel Rogers

Feb 15, 2023 14:41

US Dollar Index.png 

 

During early Wednesday trade, the US Dollar Index (DXY) maintains a defensive stance at 103.30, following a comeback from a one-week low, as dollar bulls await fresh evidence to reverse a two-day decline.

 

US inflation numbers initially failed to excite US Dollar bulls, forcing the dollar's index against six major currencies to drop to its lowest level in a week the previous day. The US Treasury bond yield and the DXY, however, were later buoyed by the Fed's hawkish remarks.

 

The US Consumer Price Index (CPI) exceeded market expectations with a 6.4% year-over-year (YoY) increase, although it was the worst YoY growth since 2021, when it fell below 6.5%. Importantly, the CPI excluding food and energy, often known as the Core CPI, rose by 5.6% compared to market forecasts of 5.5% and prior readings of 5.5%.

 

In spite of the fact that the United States inflation failed to meet expectations for a "pleasant surprise," the majority of Federal Reserve (Fed) policymakers supported more rate hikes after reviewing the data. The yields on US Treasury bonds and the US Dollar were driven by the same factor. Lorie Logan, president of the Dallas Fed, highlighted, however, that they must be prepared to continue rate hikes for a longer period of time than initially anticipated. John Williams, president of the New York Federal Reserve Bank, reiterated this attitude, noting that the task of containing high inflation is not yet accomplished. In addition, the president of the Federal Reserve Bank of Philadelphia, Patrick Harker, stated that they are not yet through (increasing interest rates), but are likely close.

 

As a result, US 10-year Treasury bond rates vary around 3.75%, up three basis points (bps) after reaching a six-week high, while the two-year equivalent reached its highest level since early November 2022 by reaching 4.60%. Similarly, Wall Street's losses towards the conclusion of the day boosted the DXY's increase.

 

US Retail Sales and Industrial Production data for January, as well as the NY Empire State Manufacturing Index for February, should be closely monitored by traders of the US Dollar Index on Wednesday in order to validate the Fed's hawkish lean and continue the recovery's momentum.