As traders are more confident in the soft-landing scenario, bullish sentiment is now prevailing in stock markets. The US dollar index took a nosedive following the meeting. It is likely to drop deeper today after the rate decisions of the ECB and the Bank of England.

They are expected to be more hawkish than the Fed was. This is why the greenback could slide lower versus its main rivals. Since yesterday, it has already lost more than 1%. In the Asian session, it was trading at 101. The yield of 10-year government bonds went down as well.

It sank to 3.39%, approaching the lows of April 2022. The US dollar index reached a 9-month low. The word "disinflation", or simply a decrease in inflation pushed once almighty dollar in a downward channel. In the morning, it was moving in the bearish corridor of 100.8-101.0.

The euro and commodity currencies rose the most amid a steep decline in the US dollar. However, the yen also managed to climb to 128.6. Apart from the Fed’s dovish rhetoric and falling US government bond yields, it appreciated amid internal factors.

Bank of Japan Deputy Governor Masazumi Wakatabe made hawkish remarks. He said that the December decision to expand the yield range was necessary to make government bonds more stable. He added that the main goal is to return inflation to 2%.

The policymaker also admitted that the regulator could make further tweaks to its policy of yield curve control. Yen bulls took notice of his speech. So, the dollar/yen pair entered the range of 128.2-128.9.
The Australian currency jumped amid a fall in the US dollar and optimism on Wall Street. In the morning, it soared to an 8-month high of 0.7154. After that, its growth slowed down. It was consolidating in the range of 0.7128-0.7160.

The Aussie seems to have finally broken out of the channel formed before September last year. So, it could resume the bullish cycle. The next RBA meeting will be held on February 7. Given the galloping inflation in Australia, the regulator’s rate decision may surprise traders.

This is why its rally is limited. Yet, in the Asian session, the Aussie received support from rising oil prices and risky assets and climbed to 0.7141.
The New Zealand dollar also moved up against the US currency. However, its upward potential is weaker compared to the Aussie. New Zealand is dealing with the consequences of severe flooding, which caused landslides, the destruction of homes, and the closure of highways.
The Reserve Bank of New Zealand meeting is on tap on February 22. The kiwi is growing at a more moderate pace. In the Asian session, it was moving in the range of 0.6500-0.6538. Eventually, it reached 0.6528.

00:00 Intro
00:27 Bullish trend in stock markets
01:00 Jerome Powell
02:16 USDX
03:27 USD/JPY
04:26 AUD/USD
05:23 NZD/USD

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