The market sentiment is mixed, but there are still interesting movements on the market.
Forex today: traders are waiting for the Fed’s statement
In anticipation of today’s rate hike does not support the US dollar. What is the reason?
- Despite investors anticipate the Fed to announce a rate hike today (20:00 MT time), the US dollar is falling. The reason might be hidden in the NAFTA’s deal. According to the claim of the Canadian Ambassador in Washington, there is a progress in the US-Canada negotiation. The Trump’s administration mitigated its strictest protectionist demand in regard to the car industry. It had a negative impact on the greenback, however, such news supported Australian and Canadian dollars.
- The Canadian dollar managed to continue the appreciation against the US dollar. The support lies at 1.2960. However, there will not be any important data for the Canadian dollar in the next few days. If the US dollar positively reacts to the Fed’s statement, the USD/CAD pair may turn around.
- The Australian dollar finally strengthened against the US dollar. The pair is trading near 0.7690. The resistance lies at 0.7715. More likely, that the strengthening of the greenback will make the AUD fall again. However, Employment Change and Unemployment Rate data (tomorrow at 2:30 MT time) may support the aussie.
- The pound managed to recover after the yesterday’s fall. Yesterday the sterling lost its positions because of the CPI and PPI Input data. Both figures were weaker than expected. However, today the weakening of the greenback and positive data of Average Earnings Index could support the sterling. Investors are waiting for the Retail Sales data (11:30 MT time) and the announcement of an interest rate (14:00 MT time) tomorrow. According to a forecast, retail sales figure should be greater than the previous one. However, the BOE is not going to raise the interest rate, it may affect the pound. A reaction of the greenback to the rate hike will be another crucial indicator of a pound’s movement.
- The New Zealand dollar is continuing to weaken. The NZD/USD pair is moving to the support at 0.7155. Today the Reserve Bank of New Zealand will announce an interest rate. However, it will remain at the same level of 1.75%, so the situation is not supportive for the kiwi. Furthermore, a possible strength of US dollar will weigh on the New Zealand currency.
- Bitcoin is continuing to rise. The cryptocurrency managed to climb to $9,000. The resistance is at $9,500. Most of the cryptocurrencies rose based on the comments of the Financial Stability Board, FSB. According to the FSB, there are no threats from the cryptocurrencies for the global financial system in the short-term.
- Oil reached three-week highs. The OPEC-led alliance reduced the timeline for restriction of a worldwide supply glut. So the oil oversupply shrinks faster than expected.
- Other currencies could strengthen based on the weak dollar. Investors are looking for the Fed’s decision.
US Core monthly retails sales will be announced on Friday at 15:30 MT time.
Stock significantly surged: S&P 500 and Nasdaq reached 6-week highs. The market sentiment may deteriorate today as Johnson & Johnson’s Covid-19 vaccine trails have been stopped because of the unexplained illness.
Canada’s retail sales will be out on October 21 at 15:30 MT time. Get ready with us for this event!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.