All eyes are on the FOMC, as it is expected to keep rates unchanged at 0.50%, although FOMC officials indicated in previous meetings before the ‘Brexit’ that two rate hikes are likely this year. The Fed is expected to touch upon the risks of the ‘Brexit’ and its effects on the U.S. economy.
Despite strong U.S. data, the U.S. dollar index fell by 10 pips and traded below 97.17 in anticipation of the Federal Reserve report.
The U.S. Consumer Confidence Index was little changed in July, indicating continued momentum for U.S. economy. The Consumer Confidence Index hit 97.3 this month vs. a reading of 97.4 in June.s
Gold settled at $1,320, ignoring the U.S. strong data. The yellow metal is awaiting today’s key FOMC statement, which will have a significant impact on the precious metal during the next period. Gold prices could decline to $1,300, if the Federal Reserve talks positively about interest rate hikes. On the other hand, prices could hit $1,330 if the Federal Reserve opts not to raise interest rates at least twice during this year.
The Euro settled below $1.10 ahead of a two-day U.S. Federal Reserve policy meeting. On the other hand, the GBP settled around $1.30 and could be strongly affected by U.S. Federal Reserve policy meeting.
The Japanese Yen pared its gains vs. the American dollar and traded below ¥104, negatively affected by U.S. New Home Sales report.
Elsewhere, New Home Sales rose more than expected in June and increased by 3.5% to a seasonally adjusted annual rate of 592k units last month, the highest level since February 2008, the Commerce Department said yesterday.
Oil prices continued to decline during yesterday’s trading session, amid oversupply fears. U.S. crude oil traded near $42 before recovering and trading below $43. Prices are still hovering around the resistance of $42.50.
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.