On Tuesday, the Greenback headed for its worst start to the year since 2008, amid concerns that the broader shape of the U.S. policy under Trump could have a negative impact on the U.S. economy. The U.S. dollar fell as much as 1%, to settle below 100 pips for the first time in two months.
The Federal Open Market Committee (FOMC) will end its two-day policy meeting later on today, amid fears of rising inflation and a soft USD, however, it could keep its interest rates unchanged. Technically, the Greenback could be affected by FOMC statement. The Greenback was strongly affected by Trump’s comment that the dollar is too strong.
Gold touched new highs as the U.S. Consumer Confidence Index fell in January after reaching a 15-year high in December and due to a weak USD.
The yellow metal settled above $1,210 at the end of yesterday’s trading session. Technically, it could trade under pressure and re-test the psychological level of $1,200 in anticipation of the Federal Reserve report.
Euro hit $1.08 vs. USD as the Eurozone Inflation rose to 1.8%, year-on-year, from 1.6%, driven by energy prices. The common currency was boosted by such data and hit new resistance levels.
Oil prices rose as much as 0.5% after news that OPEC has cut production more than expected. U.S. crude settled at $53 in anticipation of important information from the U.S. Energy Institute, which will be released today.
The most important economic events:
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.