News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • We are days away from the US Presidential election and the markets are caught in the vortex. A contested outcome would raise serious volatility for the markets whereas a decisive outcome seems to support bullish $SPX and Dollar views from the market rank. https://www.dailyfx.com/forex/video/daily_news_report/2020/10/31/SP-500-and-Dollar-Forecast-Leads-Global-Markets-with-Elections-Expectations-.html https://t.co/JnJbyu6TRT
  • The future implications of the #Elections2020 may influence $AUDUSD following the #RBA and #Fed rate decisions as Congress struggles to pass another round of fiscal stimulus. Get your #currencies update from @DavidJSong here: https://t.co/soPu0Wefz2 https://t.co/UWsERr2AYh
  • Gold prices declined in the aftermath of bearish technical cues, but a key zone of support was reinforced. $XAUUSD volatility risk is elevated ahead of the #Elections2020. Get your #metals update from @ddubrovskyFX here: https://t.co/gWOxdqk8OL https://t.co/gBMgF0YNjH
  • USD awakens, placing GBP/USD on the backfoot, while EUR/GBP cracks 0.90. Get your #currencies update from @JMcQueenFX here: https://t.co/fndMQJLul8 https://t.co/elz5gNAKrB
  • What are some factors impacting Euro’s forecast this quarter? Get your free forecast here: https://t.co/kpBYVz31Bd https://t.co/7EzMPg9Kqg
  • Emotions are often a key driving force behind #FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here:https://t.co/eILWbFgHRE https://t.co/DjMdgL5x19
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/6sqqRfTri2
  • The British Pound, Australian Dollar and US Dollar may all experienced heightened periods of volatility as geopolitical risks in North America, Asia and Europe rattle global financial markets. Get your $GBPUSD market update from @ZabelinDimitri here:https://t.co/0EFToM5Y8I https://t.co/5gsZQfX6aG
  • The New Zealand Dollar may continue to outperform the haven-associated US Dollar as price breaks above key long-term resistance. Get your $NZDUSD market update from @DanielGMoss here:https://t.co/D1DxtDkJXd https://t.co/DwkK9F9FCJ
  • #Gold prices declined following bearish technical cues, but a key zone of support was reinforced over the past 48 hours. #XAUUSD volatility risk is elevated ahead of the #USElection - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2020/10/30/Gold-Technical-Forecast-Election-Raises-Volatility-Risk-But-Support-Holds.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/5hgGEojvIE
Gold Higher, Dow Jones Gyrates, Treasury Yields Sink on FOMC Announcement

Gold Higher, Dow Jones Gyrates, Treasury Yields Sink on FOMC Announcement

2020-06-10 18:02:00
Thomas Westwater, Contributor
Share:

FOMC, COVID-19, Recession, Dow Jones, Gold, Treasury Rates – Talking Points

  • COVID-19 remains prime factor to economic recovery
  • The Benchmark Federal Funds Rate unchanged at 0%-0.25%
  • Dot plot shows rates likely to remain low until 2022

The Federal Open Market Committee of the Federal Reserve left interest rates unchanged Wednesday afternoon, in line with expectations. This latest action leaves the benchmark Federal Funds rate at its historic low of 0%-0.25%. Gold marched higher following the announcement. Granted that, the Dow Jones Index and S&P 500 Index failed to follow through on strength and quickly erased gains as Powell took the podium following the rate decision release. However, tech stocks continued to show strength and added to recent record-breaking gains in the index.

Dow Jones Index (1-Min Chart)

Gold Higher, Dow Jones Gyrates, Treasury Yields Sink on FOMC Announcement

Source: IG Charts

Wednesday's hold on rates follows unprecedented action from the Federal Reserve over the past few months amid the COVID-19 pandemic, as the Fed pulled rates down from the 1.75% to the current 0.25% upper limit to support the economy. Treasury yields dropped after a brief tick up on the FOMC news, and now continue to head lower following the conclusion of Chair Powell's remarks. The 10-Year note's yield fell to 0.75%, clawing back all gains from the past week.

Turning to the Fed's updated economic projections, reveals GDP expectations from the Fed for the current year at -6.5% which is slightly more optimistic compared to recent figures from the OECD, showing a -7.3% to -8.5% drop in U.S. GDP. Nevertheless, projections for 2021 show the Fed expects a rebound in GDP with a positive 5.0% figure. This follows The National Bureau of Economic Research announcing Monday that the U.S. officially entered a recession in February, putting an end to the record economic expansion that followed the 2008 financial crisis.

Fed Updated Dot Plot

FED Dot plot

Source: Federal Reserve

Traits of Successful Traders
Traits of Successful Traders
Recommended by Thomas Westwater
Traits of Successful Traders
Get My Guide

During the press conference Chair Powell noted the challenges presented by the COVID-19 pandemic and stated that policy decisions will remain flexible in response to the ever changing situation. Rates remaining depressed through 2022 was highlighted when asked about the outlook on monetary policy, as Chair Powell referenced the dot plot and again hit on the unknown trajectory of the economy amid the virus pandemic.

10-Year Treasury Note Yield (5-Min Chart)

treasury rate fomc

Chart created in TradingView

While further policy tools, such as yield curve control (the Fed buying certain maturity Treasuries to keep targeted rates suppressed) were not discussed in the policy statement, many market participants expect the Fed to move this into their toolbox in the coming months. Willingness from the Fed to keep the taps open on its current tools, such as the balance sheet and current funding facilities bolstered gold, as the US Dollar weakened versus its major G10 peers.

Spot Gold (5-Min Chart)

SPOT GOLD

Source: IG Charts

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

DISCLOSURES