More uncertainty coming up

Daily Analysis - 19/09/2019

Fed lowered rates but seems to be divided

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The Fed failed to maintain control of the very benchmark rate that it controls during its meeting while planning decreasing interest rates.

The past days were really hard regarding the overnight funding market, where interest rates briefly went up to 10% for some activities on Monday and Tuesday. The market is considered to be an essential support for financial markets. Banks that need for cash for a short period of time come to support their institutions. Yesterday the U.S. Federal Reserve lowered interest rates overnight, however, seemed divided regarding its next plan of action for 2020.

Gold modestly changes after Fed


On Thursday Gold was improved following a drop of about 1% in the previous trading session. That was because of the absence of transparency covering the U.S. Federal Reserve’s plan over the monetary policy easing. That confusion held markets wary.

The Fed reduced interest rates for a second time during this year yesterday but indicated that additional cuts are uncertain while the labor market continues to be strong.

Spot gold was just traded at $1,494.04 per ounce following a 0.6% decline yesterday. But, U.S. gold futures were down 1% at $1,501.39

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Brent crude futures went up 8 cents


On Thursday Oil went up following days of confusion, with markets calmed by Saudi Arabia’s commitment to return to full production by the end of the month at plants struck by drone and missile attacks last weekend. Brent crude futures went up 8 cents to $63.68 a barrel while U.S. West Texas Intermediate (WTI) crude went up 12 cents to $58.22 a barrel.

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Weak fed cut supports greenback


On Thursday the greenback gained full support following the U.S. Federal Reserve decreased interest rates. The greenback was constant versus the euro, being at $1.1033, and even against the GBP at $1.2468, after overnight profits.

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