Fed leaves rates unchanged

Daily Analysis - 09/11/2018

Weak business investment

This week had it all from midterm elections to the federal funds rate decision. The FED decided to keep the current level of its benchmark interest rate.

The Federal Open Market Committee which are known as policymaking body, as anticipated, unanimously supported to maintain the federal funds rate in an area of 2% to 2.25%. Markets estimated the central bank would keep the line at this conference and probably pass a quarter-point hike in the next month, which would be the number four of the year.

There were a few tweaks to the way policymakers are seeing economic health. On the upside, the committee recorded that the unemployment rate "has declined" since last September conference. The Labor Department last week announced that the headline jobless level was at 3.7%.

Italy cannot survive without Eurozone

While the delay between Italy and EU remains, the European Union said in a harsh and clear tone that there is "no future" for Italy if they abandon the Eurozone. The European Commission which is the legislation body of the EU and Italy have been fighting over Rome's financial policies for 2019, later the new anti-establishment administration in the country chose to raise the public spending in the following years.

Italy said that it will raise the public deficit to 2.4 % of gross domestic product three times greater than the previous administration had agreed. But, considering all the new policies that Italy needs to put ahead, the European Commission said on Thursday that Italy's 2019 deficit in reality will be 2.9% closer to 3% that EU wants.

Gold going for the biggest weekly loss since summer

On Friday Gold prices dropped to their weakest in a week and start going for biggest weekly drop since summer, on a solid dollar while the U.S. Federal Reserve showed they will proceed to raise interest rates, reducing demand for bullion. U.S. gold futures dropped 0.3% to $1,221.69 per ounce.

Spot gold dropped 0.4% to $1,218.20 per ounce reaching its lowest level since the first of this month at $1,218.07. Gold was under 1.2% for the week, its biggest weekly drop since the week of Aug. 17.Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong said

"Gold has come under pressure because of a stronger dollar. Also the FOMC meeting showed no change in the interest rates. Market sentiment from here could be bearish for gold,"

GBP is dropping once more

GBP is dropping and slipping close to 1.3000 in the outcome of the Fed remaining firmly on the way of more hikes forward of the third-quarter GDP that is anticipated to rise 0.6% over the quarter. From a technical aspect, the popular paid GBPUSD recent retracement to the upside stalled ahead of an major descending trend-line resistance, continuing into monthly highs A possible break below the specified level support, currently near the 1.3030 region will probably drive the price down even more.