On Wednesday, the Federal Reserve raised U.S. interest rates by a quarter-percentage point for the first time in 2016. In addition, it forecasts a steeper path for borrowing costs in 2017, when Donald Trump plans a full-throttle strategy to improve the U.S. economy. On the other hand, the Fed’s so-called “dot plot” showed the central bank has now penciled in three rate raises in 2017 instead of two under its prior prediction.
Fed officials still expect GDP growth to average 2% over the next three years. In addition, they expect the unemployment rate could stay close to the 4.6% rate seen last month. The U.S. dollar index rose as much as 1% and touched 102 pips.
Gold traded below $1,140 and it is unlikely to settle above the resistance of $1,160.
Euro traded below $1.05, negatively affected by a strong USD and due to Eurozone industrial output declining in October for the second consecutive month.
Also on Wednesday, Oil prices fell as much as 3% on a stronger dollar after the US Federal Reserve's decision to increase US interest rates and after a jump in crude inventories as the biggest US storage center renewed concerns about a glut. U.S. crude fell to $51 and could decline further to the psychological of $50.
The most important economic events:
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