The market sentiment improved amid the slowdown in virus cases. Let's have a closer look at the AUD, S&P 500, gold and the GBP.
The USD may be triggered by the Fed
The Federal Open Market Committee will make its statement and announce the interest rate on July 29, at 21:00 MT time. Half an hour later, the bank will hold its regular press conference with the Fed Chair Jerome Powell.
Instruments to trade: EUR/USD, GBP/USD, USD/JPY
After buying a significant amount of bonds worth trillions of dollars to support the economy, the Federal Reserve stands at a crossroads. Should the regulator unveil more stimulus during the upcoming meeting? That’s the main question, which attracts traders’ attention. On the one hand, we see that the Fed’s actions and the interest rate near zero are supporting the economy and encouraging the markets. On the other hand, rising cases of coronavirus in the US show the economy may come through a lot before a complete recovery. Therefore, further supportive actions, including additional bond purchases and careful policy guidance by the Federal Reserve may be needed.
- If the Federal Reserve is pessimistic, the USD may weaken;
- If the Federal Reserve is optimistic, the USD may strengthen.
The overall market sentiment is mixed as new virus cases continue rising throughout the world, but most economic indicators came out better than analysts expected. Let’s look at the main market movements.
The market sentiment switched to risk-off after the Fed’s Powell statement. The USD edged higher, while risker assets started falling after reaching quite high levels. Let’s have a closer look.
The US NFP will be published on August 7 at 15:30 MT time.
The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
Follow the BOE monetary policy and rate statements on August 6 at 14:00 MT time…