- Silver price faces a sell-off as the Fed pushes back rate-cut expectations for March.
- The Fed avoids rate-cut speculation until it gets confident that inflation will return to 2%.
- Investors await the ISM Manufacturing PMI and the NFP data for further guidance.
Silver price (XAG/USD) declines toward a weekly low near $22.70 as the Federal Reserve (Fed) has delivered a neutral interest rate guidance for the March monetary policy meeting. The Fed kept interest rates unchanged in the range of 5.25-5.50% as expected but pushed back expectations of rate cuts in March.
Equities and risk-perceived currencies have parted ways as S&P500 futures are positive, while the latter has been hit hard amid the absence of timing for rate cuts in the monetary policy statement by Fed Chair Jerome Powell. The US Dollar Index (DXY) extends its rally to near 103.80 as the Fed is not interested in speculating on rate cuts until they get greater confidence that inflation will sustainably return to the 2% target.
Meanwhile, investors await the Institute of Supply Management (ISM) Manufacturing PMI for December, which will be published at 15:00 GMT. According to the consensus, the Manufacturing PMI dropped to 47.0 vs. the prior reading of 47.4.
Going forward, market participants will focus on the Nonfarm Payrolls (NFP) data for January, which will be announced on Friday. The ADP Employment Change data, released on Wednesday, has set a weak ground for the official labor market data. Investors see that US employers hired 180K job-seekers, which are significantly lower than former payroll additions of 216K. The Unemployment Rate is seen rising to 3.8% against a 3.7% reading in December
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