Forex Trading News And Analysis

Fed Chair Powell said during the press conference that incoming data since the last meeting suggested the terminal level of interest rates will be higher than expected. He said this after the FOMC decided to raise interest rates by 75bps, signalling more hikes, though possibly in smaller increases. It was one of the most eventful Federal Reserve meetings since the start of the year with respect to market volatility. The US 10-year Treasury note yield bounced back above 4% as investors continue to see interest rates extending substantially higher until inflation is under control.

But, Federal Reserve Chair Jerome Powell acknowledged that the pace of rates would be slower. He added that the peak of rates compared with Forex news September projections should be revised upward, which sent US equities tumbling, US Treasury yield rising, and the US Dollar followed suit.

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That said, the Fed Rate Statement highlighted the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic DotBig overview and financial developments. Ahead of the key release, the US Dollar rallies to a nearly two-week high on Thursday amid a more hawkish stance adopted by the Federal Reserve.

Us September Trade Balance

They transferred large amounts of risk during period of high exchange rate volatility. In contrast, other investor sectors only transferred risk after market prices had stabilized. Moving on, GBP/USD traders will pay attention to the Bank of England’s monetary policy announcements for clear directions. The “Old Lady”, as the central bank is informally known, is likely to unveil a 75 bps rate hike but is also divided over the 50 bps move. Also increasing the importance of the event is the quarterly monetary policy statement that makes it the “Super Thursday”.

  • This reading came in slightly better than the flash estimate and market expectation of 47.3.
  • That said, the 61.8% Fibonacci retracement of September-October upside, near $18.95, acts as the additional downside filter before directing the bullion bears towards the theoretical target surrounding $17.30.
  • A fresh leg up in the US Treasury bond yields reinforces the prospects for further policy tightening by the Fed and continues to act as a tailwind for the buck.
  • The Fed has kept hawkish guidance on the policy as short-term inflation expectations are not anchored yet.
  • Aside from this, the Fed’s decision caused mixed reactions from market participants.
  • If the news release requires a few days or weeks to materialise, your trading positions may be open over several days.

Elsewhere, the US 10-year Treasury yields rallied to the highest level in a week, firmer around 4.11% by the press time. It’s worth noting that the Fed’s 75 bps rate hike couldn’t favor the yields earlier on Wednesday. It should be noted that the US 10-year Treasury yields rallied to the highest level in a week, firmer around 4.11% by the press time. Gold price has erased early recovery gains and resumes its bearish momentum for the second straight day this Thursday.

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