Sentiment was mostly positive during the Asian session earlier today, taking the positive handover from US equity close yesterday evening. In the US some better than expected reported quarterly results helped lift sentiment, while overnight improvements in the price of oil also helped the major Asian equity indices.
Market focus will likely shift to the FOMC’s rate decision announcement later today, as the Fed’s committee comes to an end of its 2-day policy meeting. Markets will likely be looking for clues on any upcoming rate-rises and the $4.5 trillion balance sheet unwind – in reality no major changes are expected to result immediately out of today’s policy announcement. Feedback regarding inflation should also get some attention, as it may directly impact the pace of rising rates.
The USD enjoyed some relief as it created some space from yesterday’s lows of 93.64 (based on the US Dollar index) which level also represented 13-month lows. Currently the index is at 94.13 ahead of the Fed’s policy statement later this evening.
USDJPY recovered back to 111.91 this morning continuing on yesterday’s gains as well. The euro remains on the defensive against the USD as the EURUSD holds tight to the 1.16 levels, currently the currency pair is trading at 1.1639.
Meanwhile the yellow metal enters its third day of decline, perfectly in sync and perfectly opposed to the USD’s 3-day positive closes. Gold is currently trading at $1246.45 and has today just breached through the 50 and the 100 DMAs, respectively at $1249.17 and $1247.81.
Ahead of the Fomc announcement later today, we will have the latest update on the UK’s Q2 GDP as well.
