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DAX Slides as Hawkish Powell Sends Markets Lower

The DAX index has recorded sharp losses in the Thursday session. Currently, the DAX is trading at 12,169, down 1.14% on the day. On the release front, eurozone and Germany Manufacturing PMIs missed their estimates. Eurozone Manufacturing PMI dropped to 56.6, down from 58.1 points. The German release slowed to 58.4, compared to the estimate of 59.8 points. German Ifo Business Climate also dipped to 114.7, matching the estimate.

The markets had priced in a rate hike from the Federal Reserve, and policymakers complied with a quarter-point increase on Wednesday, bringing the benchmark rate to a range between 1.50% and 1.75%. The markets were looking for any clues with regard to the pace of rate hikes in 2018 – currently the Fed is projecting three hikes, but a robust US economy could push the Fed to press the rate trigger four times. The rate statement did not directly address the issue, but there was a refreshing lack of Fedspeak from policymakers, who said that “the economic outlook has strengthened in recent months”. This phrase has not been used in previous rate statements, and the hawkish terminology helped send US markets lower on Wednesday, with the trend continuing on Thursday in European markets.

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Open season on the USD ? [2]

Economic Calendar

Thursday (March 22)

*All release times are DST

*Key events are in bold

DAX, Thursday, March 22 at 7:50 EDT

Prev. Close: 12,309 Open: 12,177 High: 12,269 Low: 12,150 Close: 12,169

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Kenny Fisher

Kenny Fisher [6]

Currency Analyst at Market Pulse [7]
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.