FED Keeps interest rates unchanged

Daily Analysis - 31/01/2019

Stocks rose after FED said be “patient” with rate hikes


On Wednesday U.S equities rose following the Fed announcement.  FED held interest rates fixed and stated that it will be "patient" with increasing rates. Powerful profits from Boeing and Apple further supported the stock market. Dow noted its first close over 25,000 since the last month of 2018. The S&P 500 increased more than 1.5%, supported mainly by the tech sectors. The Dow Jones Industrial Average ended about 434 points higher while the Nasdaq Composite improved more than 2% to 7,183.05. Jack Ablin, founding partner of Cresset Wealth stated that

"It seems like the Fed is becoming more market dependent rather than data dependent,” "The market has become accustomed to below fair-value interest rates and trying to raise them is creating hardship. Accommodation is the new neutral."

Spot gold seems steady

On Thursday Gold continued near the 8-month top that hit during the previous session. In the meantime, the greenback softened following the U.S. Federal Reserve that halted its monetary policy, plotting the way for its future hikes. Spot gold rose 2.5% this month while Spot gold was even at $1,319.70 per ounce. On Wednesday Gold rose to its largest level since May 11 at $1,323.33. U.S. gold futures moved up more than 0.6% at $1,317.70 per ounce.


Oil prices reach 2-month top

On Wednesday, Oil prices increased due to U.S. government data that revealed indications of contracting supply. Investors continued to be worried regarding the supply interruptions after the U.S. penalties on Venezuela's oil industry. International Brent crude oil futures rose about 43 cents and went to $61.74 per barrel. On Wednesday the U.S. West Texas Intermediate crude futures ended up around 90 cents at $54.23 per barrel.


Greenback weakens due to FED outlook

On Thursday the popular greenback dropped against its rivals following the FED’s dovish shift. This is a change that surprised general investor opinion and backed currencies such as the euro and the Australian dollar.

The U.S. central bank kept interest rates cool as anticipated but abandoned pledges of "further gradual increases" in interest rates and announced it would be "patient" before continuing.

The dollar index, a measure of its value against six major rivals, dropped around 0.1% to 95.26, fell about 0.40% overnight.


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