Daily Updates - 18th September 2019
The dollar traded near a seven-week high versus the yen as oil markets recovered from a supply shock, but the focus is firmly on a U.S. Federal Reserve meeting later on Wednesday that is widely expected to deliver an interest rate cut. Sterling traded near a six-week high versus the dollar as some speculators reduced excessive bets on a decline in the pound, but sentiment remained weak due to uncertainty over how the UK will exit the European Union. Major currencies are likely to trade in narrow ranges before the Fed’s meeting. Fed Reserve Chairman Jerome Powell has clearly broadcast his intention to cut rates, so some analysts warn that the dollar could actually bounce if the Fed eases policy as expected. Economists and analysts widely expect the Fed to cut its benchmark rate for the second time this year by 25 basis points to 1.75%-2.00% at a meeting ending Wednesday to counter risks posed by the U.S.-China trade war. Germany ZEW Survey Yesterday resulted positive while on the US Data front US Industrial Production resulted Positive but the markets are cued in for the Main Data which is the FOMC Minutes and Interest Rate Decisions. The Fed is expected to cut interest rates for the second time in a decade today, but Fed Chairman Jerome Powell is unlikely to deliver the message markets want to hear on plans for future rate cuts. Economists said it’s unlikely the Fed forecast will include more than one more rate cut in its outlook for this year, presented on a chart, known as the “dot plot.” Many in the markets are looking for two more cuts this year.Yesterday Explained
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