Gold Price Forecast: XAUUSD closes in on $2,000 amid Easter Monday thin trading

 

• Gold Price remains poised to recapture $2,000 amid a flight to safety.
• Elevated inflation, recession risks and the Russia-Ukraine war boost safe-haven appeal.
• The speech from Fed Chair Jerome Powell will keep investors busy this week.

Easter Monday-induced thin market conditions are offering some extra zest to bulls, as Gold Price heads closer towards the $2,000 round level. The light trading seems to be exaggerating the moves in XAUUSD, as a 0.50% drop in the US stock futures reflects a risk-off market profile. Persistent Russian military actions in the Western Ukrainian city of Lviv and the Southern port city of Mariupol suggest that a peace agreement is nowhere in sight, fuelling anxiety. Meanwhile, the Ukraine crisis-led surging global inflation is prompting investors to seek refuge in the inflation-hedge Gold Price. Buyers ignore the notable strength in the US dollar alongside the Treasury yields, as a flight to safety makes the traditional store of value, gold, more appealing.

Also read: Gold Price Forecast: XAUUSD needs to crack this level to take on the $2,000 mark

Moreover, China’s covid lockdowns and a potential European Union (EU) embargo on Russian gas could likely intensify inflation and growth concerns. This was seen as another factor that boosted the metal's appeal as a hedge against rising costs. Investors will now focus on the speech from the St. Louis Fed President and FOMC member James Bullard, which will provide insights into the likely monetary policy action by the Fed. However, the mega event will be the speech from Fed Chair Jerome Powell due later this week.

“We are of the view that the Fed is broadly in-sync with the move toward the vicinity of neutral by the end of 2022, with Governor Brainard supporting that view recently. Chair Powell's remarks in an IMF panel on the global economy will get the focus of the attention,” analysts at TD Securities explained. “While the Fed is signalling its intent to reach neutrality by year-end, and to start an aggressive QT regime, outflows from gold markets have been scarce as participants are happy to retain some optionality against the Fed's stated plan amid growth concerns,” the analysts added.

Gold Technical Analysis

The bulls are in control and taking on fresh highs. On a daily scale, XAU/USD has tested the breakout of its previous critical level at March 24 high $1,966.18 multiple times. The 20- and 50-Exponential Moving Averages (EMAs) are scaling higher, adding to the upside filters. The momentum oscillator Relative Strength Index (RSI) (14) has overstepped 60.00, which indicates a firmer bullish momentum going forward.

📕 Comment on Gold on April 7, 2022:

  📕 Comment on Gold on April 7, 2022:

 - In yesterday's trading session, precious metal Gold fell from 1933 to 1915. Yesterday's closing session was around 1924. With Gold not having too many fluctuations in yesterday's session, our opinion  My personal preference remains the same as in recent days it is preferable to sell if Gold is in the 1930-1940 zone.

 - On the D1 chart we can see that although yesterday closed with a bullish candle, in fact this candle did not show an increase, but instead, the increasing force seems to be weaker compared to the previous days.  The proof is that last night the highest price Gold recovered was around the threshold of 1932. So in today's session, I think it is possible to sell down with Gold around 1926-1930 with a safe target of 1915-1920.  and my expectation Gold will go even deeper.

 

Gold Price Forecast: XAU/USD under pressure amid surging bond yields 

Gold price is weaker as the new week gets underway. Surging US Treasury bond yields and the dollar on the front foot are dragging down the yellow metal, economists at Comemrzbank report.

Rising interest rate expectations weight on gold

“Gold fell sharply to start the week. We attribute this on the one hand to the US dollar, which is continuing to appreciate. And on the other hand, bond yields are climbing further.” 

“We believe the rise in yields and thus the increase in real interest rates are due to the higher interest rate expectations of market participants. The Fed Fund Futures are meanwhile pricing in rate hikes of 90 basis points at the next two meetings of the US Federal Reserve. In our view the gold price is holding its own impressively well against this backdrop.”

“ETF investors have also not allowed themselves to be deterred as yet: the gold ETFs tracked by Bloomberg registered inflows of 43 tons last week – already their tenth weekly inflow in succession. By contrast, speculative financial investors have withdrawn further from gold, according to the CFTC’s statistics: they slashed their net long positions by 9% to a six-week low in the week to 22 March.”
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USD/JPY to suffer a decline toward 121.00 but still targeting mid-120s – OCBC

 USD/JPY pushed through 122.00 on Thursday. Some retracement is seen today, though in the near-term, the focus will still be on USD/JPY upside as the pair pushes closer to mid-120s. 

Technical pull-backs on the cards

“Even as we are structurally positive on the USD/JPY towards the mid-120s, do not rule out technical pull-backs. The 121.00 locus may be the first support in that case.”

“For now, the BoJ and Fin Min have refrained from directly commenting on JPY weakness.”

Gold Price Forecast: XAU/USD stays on the way to $1,960, NATO, yields eyed

• Gold prices stay above short-term key resistance, now support, despite retreating from weekly top.
• Yields underpin USD rebound but all depends upon today’s NATO summit, US data.
• Intraday bears may take entries below $1,937 but $1,930 holds the key for further weakness.

Gold (XAU/USD) bulls faced rejection around $1,949 heading into Thursday’s European session, having cheered the pullback in US Treasury yields with the biggest daily jump in two weeks the previous day.

That said, the yellow metal’s pullback could be linked to the firmer US dollar and a rebound in the T-bond yields, which in turn take clues from hawkish Fedspeak and fears of an escalation in the Ukraine-Russia war.

Also underpinning the US dollar’s safe-haven demand is the covid resurgence in China and Europe, as well as market’s anxiety ahead of the US preliminary PMIs for March and Durable Goods Orders for February.

Additionally, risk-negative headlines ahead of US President Biden’s meeting with the North Atlantic Treaty Organization (NATO) allies in Europe also challenge gold prices of late.

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After falling to 1970 precious metal Gold has shown signs of recovering back to around 2009, closing yesterday's session around 1996.After falling to 1970 precious metal Gold has shown signs of recovering back to around 2009, closing yesterday's session around 1996.

 📕 Comment on Gold on 11/03/2022:

 - After falling to 1970 precious metal Gold has shown signs of recovering back to around 2009, closing yesterday's session around 1996. This shows that the downward pressure of Gold shows signs of slowing down.  In addition to the current developments and news, there is still no sign of any signs of the war cooling down, de-escalating as the Russian army continues to move towards the capital Kyiv and open more.  attacks on major cities of Ukraine.  In my personal opinion, the possibility of Gold will still be pushed up in today's trading session.

 - On the h4 time frame we can see the closest support for this precious metal is around the 1973-1982 range.  Here, investors can establish a buy position with a safe target around the 2008-2015 threshold.

Russian rouble falls to record lows after ratings downgrades

The Russian rouble slid further on Thursday, hitting record lows against the dollar and euro, after ratings agencies Fitch and Moody's (NYSE:MCO) downgraded Russia's sovereign debt to "junk" status citing the impact of Western sanctions.

At 0830 GMT, the rouble was more than 10% weaker against the dollar at 117.5 and had lost over 7% against the euro to trade at 124.1 on the Moscow Exchange, marking the first time the rouble has traded above 110 to the dollar in Moscow.

The Russian central bank imposed a 30% commission on foreign currency purchases by individuals on currency exchanges - a move brokers said appeared designed to curb demand for dollars - but that did little to halt the rouble's slide.

Russia's financial markets have been thrown into turmoil by sanctions imposed over its invasion of Ukraine, the biggest attack on a European state since World War Two.

Russia calls its actions in Ukraine a "special operation" that it says is not designed to occupy territory but to destroy its southern neighbour's military capabilities and capture what it regards as dangerous nationalists.

Since Russian troops entered Ukraine on Feb. 24 the rouble is down close to 30% against the dollar, and analysts said on Thursday it would probably remain highly volatile. The government has ordered Russian exporters to convert 80% of their forex revenues into roubles to support the local currency, but people are still queuing up at banks to buy dollars as the rouble slumps.

Trading on the Moscow Exchange's stock section remained largely closed on Thursday, a fourth day of restrictions ordered by the central bank.

Overnight, Fitch said that U.S. and European Union sanctions prohibiting any transactions with the Bank of Russia would have a "much larger impact on Russia's credit fundamentals than any previous sanctions". Moody's said the severity of the sanctions "have gone beyond Moody's initial expectations and will have material credit implications".

S&P lowered Russia's rating to sub-investment grade last week.

Russia's invasion of Ukraine and the sanctions imposed in response have led to dire warnings about the Russian economy, with the Institute of International Finance predicting a double-digit contraction in growth this year.

On Wednesday, index providers FTSE Russell and MSCI said they would remove Russian equities from all their indexes, after a top MSCI executive earlier this week called Russia's stock market "uninvestable".

Dollar retreats as risk appetite returns; U.S. inflation dials back Fed view

 MEW YORK (Reuters) - The U.S. dollar dipped on Friday, giving back some of the strong gains from the previous day, as investors gauged the latest round of sanctions on Russia and U.S. inflation data was seen as unlikely to make the Federal Reserve overly aggressive at its next policy meeting.

The greenback on Thursday notched its biggest one-day percentage gain since Nov. 10 to reach 97.74, its highest since June 30, 2020. However, it gave back some gains after U.S. President Joe Biden hit Russia with a wave of sanctions following that country's invasion of Ukraine, but refrained from imposing sanctions on Russian President Vladimir Putin and disconnecting Russia from the SWIFT international banking system.

U.S. economic data showed consumer spending increased more than expected in January even as price pressures mounted, with annual inflation hitting rates last seen four decades ago, although the personal consumption expenditures price index increased 0.6% in January after rising 0.5% in December.

"The revisions to income and spending data shows the economy was very resilient to Omicron and to high oil prices. Hopefully, the situation with Russia is short-lived, but even if oil prices stay elevated, the economy should have enough fundamental strength to tolerate high energy prices," said Brian Jacobsen, senior investment strategist at Allspring Global Investments in Menomonee Falls, Wisconsin.

"The inflation numbers weren’t great, but at least the month-on-month inflation numbers aren’t moving higher," Jacobsen said. "That should take some wind out from under the wings of the most hawkish Fed members."

The dollar index fell 0.459%, with the euro up 0.59% to $1.1257. The euro fell to $1.105 on Thursday, its weakest against the greenback since June 1, 2020.

Even with Friday's pullback, the dollar was still on track for a third straight week of gains.

The increased risk appetite was evident in the U.S. stock market, with the S&P 500 up more than 2% after staging a late session rally on Thursday.

Before Thursday's jump -- which sent the dollar to its highest level since June 30, 2020 -- the greenback had been subdued in recent weeks, as rising tensions in Ukraine fueled expectations the Fed may be less aggressive in tightening policy as it attempts to rein in inflation.

Expectations for at least a 50-basis-point interest rate hike at its March meeting have fallen to 25% from around 34% a day ago, according to CME's FedWatch Tool.

In the central bank's latest monetary policy report to Congress, the Fed warned inflation could last longer than anticipated should labor shortages and fast-rising wages continue.

The European Union is planning a third round of sanctions against Moscow, an EU official said on Friday, minutes after Ukraine's president pleaded with the bloc for faster, more forceful steps to punish Russia for its invasion of his country.

Policymakers at the European Central Bank (ECB) said the situation in Ukraine could cause the ECB to slow its exit from stimulus measures.

Investors see only a 4% chance the ECB will boost its benchmark interest rate by 10 basis points at its March 10 policy meeting. [IRPR]

The Russian rouble strengthened 1.67% versus the greenback to 83.04 per dollar after hitting hit a record low of 89.986 the day before.

The Japanese yen weakened 0.09% versus the greenback at 115.65 per dollar, while Sterling was last trading at $1.34, up 0.19% on the day.

In cryptocurrencies, bitcoin last rose 1.4% to $38,937.21.

Ethereum last rose 2.58% to $2,703.53.

Series on Russia-Ukraine Tensions:

 On Wednesday, Prime Minister Fumio Kishida said Japan is imposing sanctions on Russia over its actions in Ukraine, and considers Moscow's moves an unacceptable violation of  with Ukraine's sovereignty and international law.

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 Japan's sanctions include banning the issuance of Russian bonds in Japan and freezing the assets of certain Russian individuals as well as restricting travel to Japan, Kishida said.

 Western nations on Tuesday imposed new sanctions on Russian banks and elites after Moscow sent troops into breakaway regions in eastern Ukraine

EURO DOWNS AND SOLD AS WATER

 tterjee

LONDON (Reuters) - The U.S. dollar treaded water on Thursday and the Japanese yen held on to its earlier gains after a Russian news report of mortar fire in eastern Ukraine jangled market nerves and boosted the appeal of safe haven bets.

Russia-backed rebels accused Ukrainian forces of shelling their territory in violation of agreements aimed at ending conflict in the contested Donbass area, the RIA news agency said, a report later denied by Ukraine.

While the greenback retreated from its Asian highs after the news broke, investors remained wary that Russia will invade the Ukraine again despite rising optimism at the start of this week that a diplomatic solution would be found to prevent conflict.

Against a basket of its rivals, the dollar steadied at 95.747 after rising above 96 in early Asian trading.

But in a sign that markets were not panicking yet, the rouble remained below a November 2020 high of 80 hit last month, while bond yields were only modestly higher.

"This strongly suggests that market participants remain optimistic overall that conflict will be avoided," MUFG strategists said in a client note.

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The geopolitical news dwarfed the Fed's minutes of its January meeting, where policymakers agreed that it was time to tighten monetary policy but also that decisions would depend on a meeting-by-meeting analysis of data, according to minutes of the most recent policy meeting.

Short-dated U.S. Treasury yields fell and the yield curve steepened after the minutes as traders reassessed the probability of a 50 bps hike at the Fed's March meeting. Money markets were pricing in a 72% likelihood of a 50 bps hike next month compared to 80% at the start of the week.

The euro rebounded from earlier lows after falling as much as 0.4% after the Ukraine news. But Ukraine's denial and the location of the reported attack within already contested territory calmed things and the euro last sat at $1.1382.

The yen and the Swiss franc clung on to earlier gains, up 0.2% and 0.1% respectively versus the greenback.

EURO POUNDS HIGH ON FRIDAY

 LONDON (Reuters) -Oil prices recouped losses on Wednesday as investors weighed conflicting statements on the possible withdrawal of some Russian troops from around Ukraine amid tight global supplies and recovering fuel demand.

Brent traded at $93.86 a barrel around 1000 GMT, up 62 cents, or 0.6%, having slid 3.3% overnight after Russia announced a partial pullback of its troops near Ukraine.

U.S. West Texas Intermediate (WTI) crude was at $92.64 a barrel, up 62 cents, or 0.6%, after the contract ended Tuesday's session down 3.6%.

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Both benchmarks hit their highest since September 2014 on Monday, with Brent touching $96.78 and WTI reaching $95.82.

The price of Brent jumped 50% in 2021, while WTI soared about 60%, as a global recovery in demand from the COVID-19 pandemic strained supply.

Moscow announced a partial pullback of troops from Ukraine's borders, but NATO Secretary-General Jens Stoltenberg said on Wednesday the alliance had not seen any de-escalation, but rather that Russia was continuing its military build-up.

"The risk of a full scale invasion has receded a bit. But we are unlikely to move out of the current status quo," said Bjarne Schieldrop, chief commodities analyst at SEB in Oslo.

Beyond Ukraine tensions, the oil market remains tight and prices could still be on course for a move towards $100 a barrel.

"The price action has been an incredibly bullish one-way-street higher since just before Christmas. You don't see this kind of price action unless the market is very tight," Schieldrop added.

Investors await weekly U.S. oil inventories data from the Energy Information Administration due at 10:30 a.m. (1530 GMT).

U.S. crude and distillates inventories may have fallen by 1.5 million to 1.6 million barrels last week, a Reuters poll showed. [EIA/S]

Data from the American Petroleum Institute showed a drop in crude, gasoline and distillate stocks last week, according to market sources on Tuesday. [API/S]

(Additioanl reporting by Chen Aizhu and Florence TanEditing by Clarence Fernandez and Mark Potter

REBOUND OF EURO

 LONDON (Reuters) - The euro rebounded on Tuesday, nearly erasing all of Monday's losses, after reports that some Russian troops in areas near Ukraine have started returning to their bases.

Against the greenback, the single currency climbed 0.4% to $1.1346, and within striking distance of Monday's high of $1.1369 as European stock futures rebounded on the news.

Some troops in Russia's military districts adjacent to Ukraine are returning to bases after completing drills, Russia's defence ministry was quoted as saying, a move that could de-escalate frictions between Moscow and the West.

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"While any news about a potential de-escalation is welcome, I think the markets will want to see something more concrete before judging the crisis to be over," said Stuart Cole, head macro economist at Equiti Capital.

"By this I think it will require the removal from the border of sufficient troop numbers or military hardware that makes an invasion materially more difficult to undertake,"

Brewing geopolitical tensions had kept a lid on the euro's gains in recent days even as the European Central Bank joined its central bank peers in signaling a hawkish turn in its monetary policy at a meeting this month.

The euro tumbled to a near two-week low on Monday after Ukrainian President Volodymyr Zelenskiy called on citizens to fly the country's flags from buildings and sing the national anthem in unison on Feb. 16, a date that some Western media have cited as a possible start of a Russian invasion.

For now, investors greeted the news with relief, pushing up the currencies of economies that would be most affected by the conflict including the pound, euro and the Russian rouble while typical safe-haven shelters like the yen and the Swiss franc weakened.

Away from geopolitics, U.S. Federal Reserve officials continuing to spar over how aggressively to begin upcoming interest rate increases at their March meeting.

But the dollar failed to get a fresh lift from the comments with an index weakening 0.3% versus its rivals.

In cryptocurrencies, bitcoin was 3.4% higher, trading around $44,000.

INFLANATION RISK AT THE MARKET

 RUSSELS (Reuters) - Euro zone economic growth will be slower than earlier expected this year because of a new wave of COVID-19 infections, high energy prices and continued supply-side disruptions, while inflation will be much higher, the European Commission said.

In its regular economic forecasts, the EU executive arm said gross domestic product in the 19 countries sharing the euro would grow 4.0% this year and 2.7% in 2023.

The forecast is a cut compared to last November, when the Commission forecast 4.3% growth in 2022 and 2.4% in 2023 and is close to the latest view of the International Monetary Fund, which expects growth of 3.9% this year and 2.5% in 2023.

"Multiple headwinds have chilled Europe's economy this winter: the swift spread of Omicron, a further rise in inflation driven by soaring energy prices and persistent supply-chain disruptions," European Economic Commissioner Paolo Gentiloni said. "With these headwinds expected to fade progressively, we project growth to pick up speed again already this spring."

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The Commission expects inflation this year will be 3.5%, well above the European Central Bank's target of 2.0%, and much higher than its own forecast from November of 2.2%. This is also a more pessimistic forecast than that of the ECB from December, when the bank projected inflation at 3.2% this year.

Worried by the longer than earlier expected surge in consumer prices, the ECB has taken a hawkish turn and started preparing markets for the end of its unconventional stimulus with some hawkish board members calling for a rate hike already this year.

But the Commission, like the IMF, forecast inflation would slow again next year to 1.7%, below the ECB's target, so a potential rate rise would come just as price growth slows again. The ECB's own inflation in December was 1.8% for 2023.

"Price pressures are likely to remain strong until the summer, after which inflation is projected to decline as growth in energy prices moderates and supply bottlenecks ease. However, uncertainty and risks remain high," Gentiloni said.

The Commission said risks to the growth outlook were even as the COVID-19 infection wave could have a longer lasting impact and bring fresh disruptions to supply chains, but also household consumption could grow more strongly and investment, thanks to the EU recovery fund, could generate stronger activity.

Inflation could turn out higher if more cost pressures are passed on from producers to consumers and if that boosts the likelihood of wage growth to compensate.

"Risks to the growth and inflation outlook are aggravated by geopolitical tensions in Eastern Europe," the Commission said referring to the risk of Russian military aggression against Ukraine.

📕Prediction on Gold on 10/02/2022:

- In yesterday's trading session, Gold rose exactly as analyzed when it rose from 1824 to 1835 ($11) and closed the session with a bullish candle around 1833. However, the uptrend is dominant. dominant but in my personal opinion Gold will probably have a slight correction here.

- We can easily see that the precious metal Gold is at the resistance area around 1835, this is a relatively strong resistance area so it will not be suitable to establish a buy.on with Gold anymore. In my opinion here we can set up a small short position on this precious metal, target 1825-1820. When Gold reaches around the 1820 threshold, we will begin to consider the option to buy in with this precious metal.

📕 Comment on Gold on February 9, 2022:

- In yesterday's trading session, precious metal Gold went right in analysis when it increased from 1815 to 1828, closing the day session with a bullish candle around the 1825 price range. With Gold showing good momentum like Currently, in my personal opinion, Gold will continue to gain momentum and if there is any decline in Gold, it is likely to be an opportunity for us to establish a buy.

- Moving to the h4 time frame, we can see that Gold is currently in the old resistance area at 1828, so there is a possibility that there will be a downtrend but however, the strong bearish signal has not been seen yet and it is likely to follow. Gold will bounce up one more span to around 1835, it is likely to correct here. Therefore, in today's session, we will wait for the opportunity to buy if Gold corrects slightly in the Asian session and wait to sell if Gold approaches the price of 1835.

📕Analysis on Gold on February 8, 2022:

- Closing yesterday's session precious metal Gold ran exactly as analyzed when it rose from 1806 to 1823 ($ 17) closing the day session with a bullish candle around 1820 and the possibility of following me Gold will continue to be boosted up momentum in today's session.

- Moving to the H4 time frame, we can see that Gold is currently showing some signs of slowing down at the 1823 price area and I expect Gold can correct down slightly before bouncing up to a higher price zone. At the beginning of today's session, I expect Gold to correct around the 1813-1816 price zone, which is also the closest support zone to the precious metal Gold. The safe target would be 1825-1830.

UNBREAKABLE RECORD BY EUR/GBP

 

EURGBP races to topside resistance

The BOE raised rates by 25 basis points with dissenters in the 5-4 vote leaning to 50 bp rise. That initially sent the EURGBP to the downside.

However, after Lagarde started to switch course for the ECB, it was "fast break the other way" for the EURGBP with the price racing toward the high from last week.

The high has extended to 0.8416. The high last week reached 0.8422.

The highs today have now entered into a topside swing area between 0.84148 and 0.8424 (see red numbered circles). Along the way, the pair cracked above the 100/200 hour MAs and swing areas around 0.8370 and 0.8403.

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Earlier today, after the BOE announcement, the pair broke to the downside and through a key swing area between 0.8305 to 0.8312. The low reached 0.82827 and failed.

So in the course of the day (and really over the last 8 or so hours, the price has traded the range since December 28th - with a failed break lower added on at the lows.

The question now is "Can the upper extreme be broken and stay broken?"

If low the 50% midpoint at 0.8440 followed by the falling 100 day MA at 0.84567 are the next key targets to get to and through.

Break through the 100 day MA and there should be more follow through buying in the pair with the 200 day MA up at 0.85129 as another key target to the upside.

NEWYORK SESSION Today

 * DXY CORRECTION is currently in progress.  Most likely after the NEWYORK SESSION today the USD is more likely to STRONG again.

 * VIX INDEX is currently moving to DOWN SIDE.  VIX 24.83 is in the PRICE LEVEL.  However, if you fall below the VIX 20 LEVEL, the DEMAND for HIGH BEATA CURRENCIES can go up.

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 * RBA MEETING was held today.  However, they did not make any changes to the INTEREST RATE.  They expect to end QE on February 10th.  They further stated that LABOR DATA and INFLATION DATA FOCUS.  They say that LABOR DATA will be much better in the future than they expected.  They expect a 2% growth in GDP in 2023.  They say inflation will rise to around 3% in the coming quarters.

XAU/USD Price Forecast: Technical outlook

 

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XAU/USD Price Forecast: Technical outlook

Gold is trading near the bottom of a Pitchfork’s channel, drawn from the beginning of December, as depicted by the daily chart. That trendline intersects with a downslope trendline, drawn from August 2020 swing highs, acting as resistance for the non-yielding metal around $1,790-$1,800. Furthermore, the daily moving averages (DMAs) reside above the spot price. Therefore, XAU/USD is downward biased.

The first support level would be December 15, 2021,  swing low at $1,753. A breach of the latter would expose October 6, 2021, a daily low at $1746, followed by September 29, 2021, a low at $1,721

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Dollar Rises Like A Ferrari

 LONDON (Reuters) - The dollar climbed to multi-week highs against other major currencies on Thursday, bolstered by the prospects for faster and larger interest rate hikes in the months ahead.

As London trade got under way, the dollar index held at its highest levels since mid-December, while the euro languished at two-month lows of $1.11930. The greenback also hit its highest levels in more than a year against the New Zealand dollar and a seven-week peak against Australia's currency.

It rose broadly against emerging market currencies as money markets moved swiftly to all but price in as many as five Federal Reserve rate rises this year.

The Fed concluded a two-day meeting on Wednesday and Fed chief Jerome Powell said the central bank was in a mind to begin hiking in March to tame inflation.

He stressed that no decisions had been taken, but answering a question about whether the central bank would consider a 50-basis point hike, he replied without ruling it out.

He said instead that the economy seemed stronger than in the most recent hiking cycle and inflation, much hotter with room to raise rates without "threatening" the labour market.

U.S. gross domestic product figures later on Thursday are expected to show annual growth at its strongest since 1984.

"While the market had already been priced for hikes, a lot of people were assuming that the Fed might be more sensitive to the equity market, which it wasn't," said Jane Foley, head currency strategist at Rabobank. "Also the Fed's mention the balance sheet has focused markets' mind on the withdrawal of stimulus."

Foley added that a shake-out of overly long dollar positions earlier in the month had left the greenback in a position to react to the latest Fed signalling.

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YUAN HIT

The dollar's overnight leap of 0.7% against the yen was its sharpest in more than two months, while Treasury yields shot higher and stock markets took a fresh beating as rate-hike prospects resonated.

The dollar index was last at 96.825, holding near its highest levels since mid-December.

The risk-sensitive Australian dollar was last down about 0.5% at $0.7077, having fallen to as low as $0.7064, while the New Zealand dollar fell 0.7% to $0.6597, a nearly 15-month trough.

Sterling fell to a one-month low at $1.3407 and was last down 0.4% on the day. Britain's pound is delicately balanced as traders keep a wary eye on Prime Minister Boris Johnson, who is under pressure after attending parties during lockdowns, and on next week's Bank of England meeting. [GBP/]

Elsewhere, China's yuan took a hit as data showed Chinese industrial profits grew at their slowest pace in more than 18 months, bolstering the case for policy support.

The yuan was on course for its steepest daily drop in more than a month in onshore trade and last traded at 6.3632 to the dollar. Emerging markets currencies across Asia also logged losses.[CNY/][EMRG/FRX]

After a battering last week, cryptocurrencies have mostly held their ground in the wake of the Fed's meeting, though bitcoin was last down 2% at $36,049.