On May 19th, Forexlive reported on two major events that impacted the foreign exchange market. The first was the stalling of debt ceiling talks in the United States, and the second was Federal Reserve Chair Jerome Powell’s careful language choices during a speech.
The debt ceiling is a limit on the amount of money the US government can borrow to fund its operations. If the debt ceiling is not raised, the government risks defaulting on its obligations, which could have severe consequences for the economy. The talks to raise the debt ceiling have been ongoing for several weeks, but as of May 19th, they had stalled.
This news had an immediate impact on the foreign exchange market, as investors became concerned about the potential consequences of a US default. The US dollar weakened against other major currencies, as investors sought safer assets such as gold and the Japanese yen.
The second event that impacted the foreign exchange market on May 19th was Federal Reserve Chair Jerome Powell’s speech. Powell spoke at a virtual event hosted by the National Community Reinvestment Coalition, where he discussed the Fed’s efforts to support the economy during the pandemic.
Powell’s language choices were carefully crafted to avoid causing any major market movements. He emphasized that the Fed was committed to supporting the economy for as long as necessary, but also acknowledged that inflation had risen faster than expected in recent months.
This cautious approach from Powell was likely intended to avoid spooking investors, who have become increasingly concerned about inflation in recent weeks. The US dollar remained relatively stable following Powell’s speech, as investors waited for further guidance from the Fed.
Overall, May 19th was a day of significant developments in the foreign exchange market. The stalling of debt ceiling talks and Powell’s careful language choices both had an impact on currency values, highlighting the importance of staying up-to-date with the latest news and events when trading forex.
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- Source: https://zephyrnet.com/forexlive-americas-fx-news-wrap-19-may-debt-ceiling-talks-stall-powell-picks-his-words-forexlive/
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