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Breaking news

Federal Reserve Leaves Interest Rates Unchanged, Maintains Monthly Asset Purchases

Real Time News
  • @DailyFX https://t.co/hNPCLIOo20
  • Gold price action tumbles lower as the US Dollar strengthens broadly following the Fed. Get your $XAUUSD market update from @RichDvorakFX here:https://t.co/GWJcMiM3Vd https://t.co/X8WsTFwxFx
  • Fed's Powell: - No sense of panic in regard to inflation - I do not believe wage increases are causing price inflation
  • Fed's Powell: - High inflation prints not "what we were looking for" - Spike in inflation driven solely by supply side shock
  • Fed's Powell: - We expect RRP activity to remain elevated - Repo facilities performing as expected
  • Fed's Powell: - MBS and tapering were brought up by a number of FOMC participants - We will taper both (MBS & Treasuries) at the same time most likely
  • Fed's Powell: - Strong capital requirements are a "must" for banks, especially the largest banks - Capital requirements allow banks to continue to perform during severe downturns
  • The July FOMC press conference is hammering home this point: the labor market mandate is now on equal footing with the inflation mandate (which is atypical); and Powell is now making the case that the labor mandate is *more important* to normalization than the inflation side. https://t.co/saAmTwpTRw
  • Fed's Powell: - Fed has not made a decision on when taper will commence - Variety of opinions with in the Committee on when tapering should begin
  • Fed's Powell: - Transitory means not impacting longer-run inflation patterns - We must be extremely careful when it comes to the inflation mandate

The S&P 500, a frequent bellwether for general risk appetite, extended losses into a third consecutive week. The tendency for economic data in the world’s largest economy to surprise higher has been shrinking since the middle of July. Catching a bid lately has been the anti-risk Japanese Yen and to a lesser extent the haven-linked US Dollar.

This past week, the Federal Reserve might have left investors wanting more, especially on the quantitative easing aspect. Doubts over further US fiscal stimulus may have also played a role in keeping the USD suppressed. Sentiment-linked Crude Oil prices were on the rise, bolstered by a combination of falling US crude inventories and compliance in output from OPEC+ producers.

With that in mind, all eyes turn to testimony from Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin. They will be talking before the House Financial Services Committee on the CARES Act. Across the northern border, the Canadian Dollar will be eyeing Prime Minister Justin Trudeau. He will be offering a new agenda for a spending plan amid the economic recovery.

Following recent strength, the New Zealand Dollar awaits this week’s RBNZ monetary policy announcement. Informal contacts between the United Kingdom and the European Union around Brexit may drive volatility in the British Pound and Euro. Volatility risk, as shown by the VIX ‘fear gauge’, seems to be on the decline however. What else is in store for markets ahead?

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Fundamental Forecasts:

Euro Forecast: EUR/USD Outlook Turns More Bearish After Failure at 1.20

The outlook for the EUR/USD pair has worsened after its failure to move back to the high just above 1.20 touched on September 1 despite the ECB’s decision earlier this month not to talk down the Euro.

Japanese Yen Exhibits Bullish Behavior as BoJ Braces for Negative CPI

The Japanese Yen may continue to exhibit a bullish behavior as the Bank of Japan (BoJ) appears to be in no rush to alter the path for monetary policy.

Crude Oil Prices Vulnerable Amid Fading Demand, Oversupply Concerns

Crude oil prices could reverse lower as the OPEC Monthly Oil Market Report (MOMR) forecasts fading global demand and oversupply concerns.

US Dollar Outlook Bearish on Mnuchin & Powell Testimonies, Key US Data

The US Dollar may fall if demand for haven-linked assets fall after testimonies from Powell and Mnuchin to the House. Better-than-expected data may compound the Greenback’s selling streak.

New Zealand Dollar Outlook: NZD/USD May Rise on RBNZ, Watch S&P 500

The growth-linked New Zealand Dollar may rise on the upcoming RBNZ rate decision following rosy economic data. However, downside potential in the S&P 500 could offset NZD/USD gains

Nasdaq 100, DAX 30 & FTSE 100 Forecasts for the Week Ahead

Technology stocks continue to be a source of weakness for US equities, undermining risk appetite. Meanwhile, US-China tensions simmer beneath the surface creating uncertainty.

Technical Forecasts:

Mexican Peso Technical Forecast: Bearish Pressure Remains for USD/MXN

USD/MXN pick up further downside momentum as support levels are taken out

British Pound (GBP) Weekly Outlook - GBP/USD and EUR/GBP Forecasts

Sterling remains trapped by overarching fundamentals drivers and both GBP/USD and EUR/GBP are going to have to wait until the Brexit dust settles.

US Dollar Outlook: DXY Still Struggling to Rise From Big Support

The Dollar has bottoming potential, but that is starting to lose weight as it fails to sustain any lift; next week could be a big one for USD’s near-term outlook.

Oil Price Outlook: Crude Recovery Vulnerable below Trend Resistance

Oil prices saw a reprieve to the recent selling pressure but remain at risk while below downtrend resistance. Here are the levels that matter on the WTI technical chart.

Australian Dollar Forecast: AUD/USD May be Setting Stage for Reversal

It was a quiet week in Aussie as AUD/USD put in its second consecutive week of indecision. But taking a more granular look highlights the potential for a reversal scenario.

S&P 500 Index May Struggle Near-Term, Trend Still Leads Higher

The S&P 500 index may struggle in the near term – drifting sideways within the bounds of its Bollinger Band – but the overall trend still looks bullish.

US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD

US Dollar vs Gold, currencies

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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