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The U.S. Federal Reserve Keeps Rates Steady

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On Wednesday, the U.S. Federal Reserve has kept interest rates on hold but left the door open for a hike in December. On the other hand, the Federal Reserve's Open Market Committee noted that the inflation is still below their target of 2%, and they said they could hike rates if there's "some further evidence" of meeting their goals.

Following two-day November meeting the Fed said, the committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives.

The U.S. dollar index declined for a second day in a row, but slightly trimmed its losses after the Fed's decision and settled at 97.45.

Gold prices jumped to their highest level in nearly a month yesterday amid uncertainty surrounding the U.S. presidential election as well as weakness in the USD.

The precious traded above $1,300 before returning to trade below such levels. On the other hand, Gold could be affected largely by U.S. non-farm payroll data. Technically, the yellow metal could re-test $1,300 once again.

UK Construction Purchasing Managers' Index (PMI) rose unexpectedly to 52.6 from 52.3. GBP touched $1.23 but failed to maintain its gains, negatively affected by Wednesday's FOMC statement. Technically, Cable could settle at $1.23 in anticipation of U.S. non-farm payroll data, which will be released this Friday.

Oil prices declined nearly 3% yesterday after a record weekly builds in U.S. crude stocks added to fears of all-time highs in OPEC output that suggested little could be done to control the global glut. Oil pared its losses and touched $45 before trading at $45.5. Technically, it could decline once again to $45.

The most important economic events:

  • GBP High Court Rules on Brexit Trigger: (GMT 12:00) – Important
  • GBP Bank of England Rate Decision (NOV 3): (GMT 14:00) – Important – Forecast (0.25%) – Previous (0.25%).
  • GBP BOE Asset Purchase Target (NOV): (GMT 14:00) – Important – Forecast (435b) – Previous (435b).
  • GBP Bank of England Inflation Report: (GMT 14:00) – Important
  • USD ISM Non-Manufacutring Composite (OCT): (GMT 16:00) – Important – Forecast (56) – Previous (57.1).

Disclaimer
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.

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