Marketwatch North America

Daily Insights
July 27, 2023

Yesterday the Federal Reserve raised the fed funds rate by 25 basis-points to a target range between 5.25% and 5.50%, a 22-year high. The rate hike was widely expected so had muted impact on market volatility. Fed Chairman left open the possibility of another quarter-point hike this year at one of the FOMC’s last three remaining scheduled meetings during 2023.

Traders remain skeptical of another hike judging by Fed Funds Futures which imply sub-23% probability hikes at the FOMC’s September and November meetings and a 16.5% likelihood of a cut at the December meeting.

Today’s key economic data releases for the U.S. were above survey estimates. Annualized quarterly GDP for Q2 was 2.4%, beating the 1.8% estimate. Preliminary Durable Goods Orders for June were 4.7%, much higher than the 1.3% estimate. And Weekly Jobless Claims were 221k, est. 235k.

The ECB raised its deposit facility rate today by 25 basis-points to 3.75%. In its rate announcement statement key wording was changed from ‘Inflation has been coming down’ to ‘inflation continues to decline’ and signaling that future rate rates were essentially a 50/50 coin toss.

The USD has surged following the ECB’s rate action with the U.S. Dollar Index now 0.70% following the hike. The EURUSD is -0.94% since the ECB’s hike and is -0.50% for the day.

The dollar is mixed against its G10 counterparts, the biggest gain now vs. the EUR, but also advancing 0.46% vs. the GBP, 0.33% vs. JPY, and 0.31% vs. CHF. The dollar’s widest decline is a 0.29% drop vs. NZD.

U.S. equity futures are signaling a higher open today, following global equity indexes which are in the green today.

Economic Calendar

USD - Pending Home Sales
EUR - Main Refinancing Rate
EUR - Monetary Policy Statement
USD - Advance GDP q/q
USD - Unemployment Claims
EUR - ECB Press Conference

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 140.726 139.377
eur/usd 1.11495 1.10471
gbp/usd 1.29957 1.28817
aud/usd 0.68211 0.67589
usd/cad 1.32055 1.31577
Equities and Commodities
SP500 4,566.7500
NASDAQ 14,334.8400
DOW 35695.9
GOLD 1964.15
S&P 500

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.

About Mark Allen


Mark Allen, a Senior Trader at the GPS Capital Markets Salt Lake City office, boasts nearly 30 years’ market trading experience, with a focus on foreign exchange. Having worked with GPS for the last decade, he adeptly manages market risk during New York trading hours. Prior to joining GPS, Mark co-managed a London hedge fund from San Diego and traded for a multinational bank in San Francisco.