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Hello everyone, today XM Forex will bring you "[XM Group]: Powell is not hawkish enough, Oracle steals the limelight of the Fed's interest rate cut! US data becomes the focus". Hope this helps you! Original content below:
On December 11, the U.S. dollar (USD) recovered from early losses against its six major currency rivals after the Federal Reserve (Fed) announced a widely expected interest rate cut and signaled that it may keep rates unchanged in the www.xmyktj.cning months.
Overnight, as expected, the Federal Reserve lowered its benchmark interest rate by 25 basis points to 3.5% to 3.75%. However, Federal Reserve Chairman Powell expressed a balanced attitude towards the outlook at a press conference, alleviating market concerns about hawkish www.xmyktj.cnrmation. U.S. stocks rose after the decision to cut interest rates, with the S&P 500 index rising about 0.7%. "I don't think a rate hike is anyone's baseline expectation," Powell said. This left interest rate futures markets pricing in at least two rate cuts next year and weighed on the dollar, pushing EUR/USD above technical resistance and above 1.17.
The bond market received a further boost as the Federal Reserve announced that it would begin purchasing short-term Treasury bonds as soon as Friday to support market liquidity. The benchmark 10-year U.S. Treasury yield fell about 3 basis points to 4.13%, and the two-year U.S. Treasury yield fell about 4 basis points to 3.52%. The money market has been highly volatile recently, and tight liquidity has led to a premium in short-term interest rates.
Jack Chambers, senior interest rate strategist at ANZ Bank, said: "The Fed does not want this to continue because it will hinder the transmission of monetary policy."
Earlier in the Asian trading day on Thursday, the Australian Bureau of Statistics (ABS) reported that the country's unemployment rate was 4.3% in November, the same as last month. This figure was lower than the market consensus of 4.4%. In addition, Australia’s employment change index increased from 10The monthly reading of 41,100 (raised to 22,000) fell to -21.3K, below the forecast of $20,000.
AUD/USD is facing some selling pressure following the release of mixed Australian jobs data and is currently trading below $0.6600
AUD/USD has performed strongly above 156.00 in the mid-term, driven by a rebound in US dollar demand. Earlier on Thursday, Japan's Chief Cabinet Secretary Minoru Kihara said the government would pay close attention to the impact of U.S. financial conditions on Japan's economy after the Federal Reserve cut interest rates.
The US dollar-Swiss French exchange rate remains around 0.8000. Traders are awaiting an interest rate decision from the Swiss National Bank (SNB), which is likely to continue its current zero interest rate policy at its December meeting.
USD/CAD remains defensive above 1.3800. The Bank of Canada (BoC) kept its key interest rate at 2.25% on Wednesday, helped by encouraging economic data in the third quarter. Bank of England Governor Steve McCallum said interest rates were currently at a "roughly appropriate level" to control inflation around the 2% target and support the structural transformation of the economy.
EUR/USD fell below 1.1700 after hitting an eight-week high in early Asian trading on Thursday.
GBP/USD weakened after previously approaching the 1.3400 mark. On Tuesday, Bank of England deputy governors Clare Lombardelli and Dave Ramsden backed a dovish monetary easing cycle, saying inflation risks remained elevated.
Gold attracted some sellers heading into the European trading session at prices around $4,200. Silver adjusted to close to $62.00 after hitting an all-time high of $62.89 during the Asian trading session.
In terms of www.xmyktj.cnmodities, oil prices fell slightly on Thursday after briefly rising after the United States seized a sanctioned oil tanker off the coast of Venezuela, exacerbating tensions and raising concerns about supply disruptions. Brent crude and U.S. crude futures were slightly lower, at $62.15 and $58.44 a barrel, respectively.
Euro: The euro rebounded from 1.1467 against the US dollar, breaking through the temporary top of 1.1681, and the intraday bias was upward again. As mentioned before, corrective fall 1.1917 should be www.xmyktj.cnpleted in 1.1467. A solid break above the 1.1727 resistance would solidify this view and bring about a retest of the 1.1917 high. However, if it falls below the 1.1614 support, it will revisit the 1.1467 low in the short term.
The above content is about "[XM Group]: Powell is not hawkish enough, Oracle steals the limelight of the Fed's interest rate cut! US data becomes the focus". It is carefully www.xmyktj.cnpiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!
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