The Fed cut interest rates by a quarter percentage point for the first time since 2008
|The fed cut interest rates by a quarter percentage point, as expected, at 2 a.m. for the first time since 2008, citing concerns about the slowing global economy and U.S. inflation and suggesting it was prepared to lower borrowing costs further if necessary. However, fed chairman Colin Powell said the rate cut is essentially a policy change in the middle of the cycle, not the beginning of a long series of rate cuts.
The dollar hit its highest level in more than two years and is currently trading around 98.75, with the upper pressure at 99 and the lower support around 98.20.
The EUR/USD effectively broke the round mark of 1.1100, setting a new low for nearly 2 years, with short-term support at 1.1050 below and 1.1000 below, short-term pressure at 1.1100 above and pressure at 1.1150 above.
The pound's rebound was thwarted yesterday, but it suffered a fourth straight fall, falling 4.23 per cent against the dollar in July, its worst month since October 2016, as fears of a non-deal Brexit mounted. Watching tonight's BoE rate decision and Carney's speech, the bank of England is expected to keep rates unchanged. The upper pressure in 1.2200, below the short-term support in 1.2100, effectively below the bearish line to 1.2200.
XAU/USD
Spot gold tumbled nearly $20 to a near two-week low of $1,410.69 an ounce. The fed cut rates for the first time since 2008 but failed to cheer investors as markets priced in the impact and the central bank gave no dovish outlook. Today lower support at 1400 integer pass, the pressure above 1420 around.
USO/USD
Oil prices in New York retreated yesterday after hitting a two-week high before falling sharply on Mr. Powell's remarks. U.S. crude inventories fell 8.5 million barrels last week, the seventh straight weekly decline, according to the energy information administration. While the fed cut interest rates for the first time in a decade, Powell said this was not necessarily the start of a monetary easing cycle, with the dollar rising, which is usually bad for oil prices. The upper pressure is around 58.30 and the lower support is at the 57.00 level.
PS: Today Focus
15:55 final Market manufacturing PMI for Germany in July
16:00 final reading of Market manufacturing PMI for the Eurozone in July
16:30 UK manufacturing PMI for July
19:00 benchmark interest rate of the bank of England in August (%)
19:30 layoffs of challenger enterprises in July (ten thousand)
20:30 Initial jobless claims for the week ended July 27 (10,000)
21:45 final Market manufacturing PMI for July
22:00 U.S. ISM manufacturing PMI for July
19:00 the bank of England in London releases interest rate decision, monetary policy meeting minutes and quarterly inflation report.
19:30 bank of England governor Mark Carney holds a press conference in London.
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