Market In-Review: USD Weakens On Accommodative Policy

? USD weakens vs. most currencies as Fed refrains from rate hike

? USD’s weakness aids Bitcoin prices exceed USD 1,000

? GBP sees selloff after BoE keeps rates unchanged & House of Commons votes on Article 50

? Financial stocks advance towards weekend as Trumps prepares to unwind Dodd-Frank

? Gains at financials aid U.S. indices recover from early-week losses

While the U.S. economy continues to advance under Trump, U.S. policymakers are having somewhat of a difficult time heating the local labor market to pre-crisis levels. This, in turn, means that the Fed is reluctant to continue hiking rates. Friday’s Nonfarm payrolls saw an impressive 227K increase at the number of jobs, greatly exceeding the 175K expected. The negative side, on the other hand, was also quite dominant this time, with Unemployment rising from 4.7% to 4.8% and perhaps most cardinally, wages are refusing to gain as average hourly earnings now point to a 2.5% annual advance, down from a 2.9% pace last month.

As for the other end of that coin, earlier during the week, the Fed left interest rates unchanged. Expectations for a rate hike were quite modest, with this meeting not being followed by a press conference, although a hike was priced in by the bond market at a noteworthy 14.5%. Worse off, the Fed refrained from conveying the notion that the upcoming, March, announcement will be one where they hike again.

Lackluster U.S. tightening projections have translated to EUR/USD rising about 0.8% during the week, which sums to nearly a 4% strengthening of the Euro vs. the Dollar since an abyss of 1.0388 in December.

The stronger Euro is also weighing on EUR equities. The DAX, in particular, lost some 1.4% during the week. The CAC 40 shelled off a more modest 0.3%.

As for those who gain from this, weakness in the Dollar also meant a better safe haven image for Bitcoin. The cryptocurrency ascended above the USD 1,000 mark on Thursday, recording the first time since January 5th it has done so, ending the week at USD 1,011.66.