Top 5 Things to Know Before You Start Trading
This Thursday the market sees a lower USD following FOMC meeting. Oil and gold are higher.
1 – USD Trading Lower as Rate Hike Expectations Dim
The US dollar (USD) dropped to new 13 month lows against a basket of currencies, after the Federal Reserve (Fed) released a very cautious wording on US inflation outlook and subsequently caused many traders to rethink whether it will raise rates again this year. The probability of another rate hike this year fell to 40%.
2 – Gold Higher Due to a Low USD
Gold rose to the highest level since June 15, hitting a high of $1265 as the Fed kept rates the same. Gold moves in opposite direction from the USD, so when the USD falls, Gold usually climbs in value.
3 – Indices Up on Day Earnings Reports Day
The S&P 500, Dow Jones and Nasdaq closed at record highs following a day of strong corporate earnings. Most Asian stock markets trade positive despite dollar weakness.
4 – JPY and AUD Trading Higher Than USD
Overnight, the USD remains under pressure, but the pace of decline is less aggressive than after yesterday’s Fed statement. EUR/USD trades at 1.1700. USD/JPY slipped below 111 temporarily. AUD/USD jumped above the psychological barrier of 0.80 (as high as at 0.8060). Meanwhile, USD/CAD was almost unchanged at 1.2444, very close to the previous session’s 14-month trough of 1.2415.
5 – Oil Higher Following Lower Gasoline Supplies
OIL prices extended gains in North American trade on Wednesday, hitting the highest levels in around eight weeks, after data from the U.S. Energy Information Administration (EIA) showed a large drop in domestic crude and gasoline supplies.