Market Drivers; US Session: FOMC’s Rate Cut Rearranges Market Conditions

Mohamed Abdelhamid 19 September, 2024 1:36 am Daily Economic Reports, Economic Report, Forex Market, Market Update

The US Dollar Index (DXY) weakened to the 100.20 region, just to rebound afterwards and reclaim the 101.00 hurdle and beyond in the wake of the FOMC event. The usual weekly Initial Jobless Claims are due on September 19, seconded by the Philly Fed Manufacturing Index, the CB Leading Index, and Existing Home Sales.

The dollar, overall, regained composure and bounced off multi-month lows as traders continued to assess the Fed’s 50-bps interest rate cut in quite a volatile session on Wednesday.

GBP/USD advanced to yearly highs near the 1.3300 barrier on the back of the downward bias in the US Dollar and mixed UK CPI data. The BoE meets on September 19 and is expected to leave its policy rate unchanged.

EUR/USD faded the initial uptick to multi-week tops in the 1.1190 zone, coming under pressure and briefly piercing the 1.1100 support late on Wednesday. On September 19, the Current Account results in the broader Eurozone are due, along with a speech by the ECB’s Schnabel.

AUD/USD could not sustain a move to the 0.6800 area, relinquishing gains and eventually receding to the 0.6750 zone. The release of the Australian labour market report takes centre stage early on September 19.

USD/JPY resumed its downtrend and partially faded Tuesday’s pullback following the Fed meeting. The weekly Foreign Bond investment figures are only due on September 19.

Key Commodities:

Prices of Gold rose to record tops around the $2,600 per ounce troy, although prices lost momentum and eventually ended with marked losses. Silver prices, on the other hand, tumbled to four-day lows in the sub-$30.00 region per ounce.

WTI prices added to losses recorded in the previous day despite the weak dollar and the resurgence of geopolitical effervescence in the Middle East.

Also Read:
How have US Stocks Reacted to FOMC Decision?