The US Dollar Is Strengthening. The Fed Has Kept Interest Rate Unchanged

The US currency is strengthening against a basket of currency majors. The US dollar index (#DX) closed in the green zone (+0.16%) yesterday. Investors assess the results of the Fed meeting. The regulator left the key interest rate unchanged at the level of 0.00-0.25% per annum, as experts forecasted. Fed members expect the base interest rate to remain at the current level until the end of 2023. In addition, the Fed improved its forecast for US GDP for 2020 but worsened its forecasts for 2021-2022. US GDP is expected to decline by 3.7% this year, grow by 4% in 2021 and by 3% in 2022.

The British pound has been growing after EU officials threatened that the chances of a trade deal with the UK would be diminished if the British government continued to push forward an internal market bill that violated all agreements to exit the country from the EU. It should be recalled that British Prime Minister Boris Johnson criticized the European Union, as the bloc refused to compromise in trade negotiations and received parliamentary approval to violate Brexit conditions. The EU wants Johnson to stop working on the internal market bill, but the official has no intention of backing down on his plans. Investors also expect the Bank of England meeting today, during which interest rate decision will be made.

Today, during the Asian trading session, the Bank of Japan meeting has been held. At the end of the meeting, the regulator maintained its ultra-loose monetary policy and left the interest rate unchanged at -0.10% per annum.

The "black gold" prices are consolidating. At the moment, futures for the WTI crude oil are testing the $39.85 mark per barrel.

Market indicators

Yesterday, there was a variety of trends in the US stock market: #SPY (-0.40%), #DIA (+0.16%), #QQQ (-1.59%).

The 10-year US government bonds yield is consolidating. The indicator has reached the level of 0.68-0.69%.

• - Consumer price index in the Eurozone at 12:00 (GMT+3:00);
• - Bank of England interest rate decision at 14:00 (GMT+3:00);
• - Initial jobless claims in the US at 15:30 (GMT+3:00);
• - Philadelphia Fed manufacturing index at 15:30 (GMT+3:00).

by JustMarkets, 2020.09.17

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.