Author: Brett Gordon
The U.S. dollar rose yesterday after the Federal Reserve cut its key interest rate by 25 basis points as expected, but hinted that more cuts are not guaranteed. Fed Chair Jerome caused some confusion and eventually a huge selloff in the U.S. stock markets by first suggesting the cut might be the only cut and then saying there might be more.
In his news conference after the rate cut announcement, Powell struggled to explain the need for a cut when the domestic economy is performing well, but stressed that rising trade tensions have caused many businesses to hold off on investment decisions.Over night Trump mentioned the U.S would impose 10% Tariff on a additional 300 billion worth of Chinese imports next month, as he is running out of patience with stalled talks
Look out for Non Farm payrolls tonight and jobs data out of the U.S , generally a big market mover.
GBP continued its downward momentum as investors rushed to factor in the possibility of Britain leaving the European Union without a deal.Britain’s new prime minister Boris Johnson has vowed to pull the country out of the EU by Oct. 31, whether transitional.
EUR down a bit during yesterday`s trading session again, as we continue to see US dollar strength pick up. The Federal Reserve has suggested that it is more or less in a “wait-and-see mode” when it comes to interest rate cuts, and that has people repricing almost everything. With the European Central Bank likely to ease further into the future, it makes sense that the Euro gets hammered.
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