The dollar weakened and the yen recovered from near multi-decade lows on Wednesday after the US Fed kept interest rates on hold at as expected and policymakers continued to anticipate three U.S. interest rate hikes this year, even as inflation remained high.
The US central bank has kept rates at 5.25%-5.50% unchanged and maintained their balance sheet reduction at the same pace since May 2023. In their statement, Fed officials underscored the US economy’s solidity and the labor market’s robustness.
The Fed’s updated quarterly economic forecasts showed that the price index for personal consumption expenditures, excluding food and energy, rose 2.6% by the end of the year, compared with the 2.4% forecast by the US Federal Reserve in December.
The new policy view also raised the outlook for the U.S. economy. Policymakers now see growth at 2.1% this year compared to 1.4% projected in December, while the unemployment rate is seen ending 2024 at 4%, versus 4.1% anticipated late last year.
Gold prices gained, as the U.S. dollar and bond yields ticked lower after the Federal Reserve maintained its projection of three rate cuts for this year.
Copper prices fell in London on Tuesday as investors locked in profits from the metal’s recent rally and the dollar rose ahead of a U.S. Federal Reserve decision on interest rates.
Crude Oil prices retreated from the previous session’s highs Wednesday as caution set in ahead of the Fed decision, overshadowing data showing weekly U.S. crude stockpiles fell more than expected.
MCX gold futures settled +0.25% to 65750.Silver settled +0.03% at 75313. Copper settled -0.37% to 753.60. Crude oil -2.82% at 6748. Natural gas -1.87% to 141.9.
Economic data and events scheduled – Will PMI data take over?
Eurozone
At 1.45pm-
French Flash Manufacturing PMI. Data is foreseen at 47.5 from previous 47.1.
French Flash Services PMI. Data is foreseen at 48.8 from previous 48.4.
At 2.00pm-
German Flash Manufacturing PMI. Data is foreseen at 43.1 from previous 42.5.
German Flash Services PMI. Data is foreseen at 48.8 from previous 48.3.
At 2.30pm-
Flash Manufacturing PMI. Data is foreseen at 47.00 from previous 46.5.
Flash Services PMI. Data is foreseen at 50.5 from previous 50.2.
Current Account. Data is foreseen at 32.3B from previous 31.9B
At 4.30pm- German Buba Monthly Report.
Above data could have a volatile impact on the Euro.
UK
At 3.00pm-
Flash Manufacturing PMI. Data is foreseen at 47.9 from previous 47.5.
Flash Services PMI. Data is foreseen at 53.8 from previous 53.8.
At 5.30pm –
Monetary Policy Summary.
MPC Official Bank Rate Votes. Foreseen at 0-1-8 from previous 2-1-6.
Official Bank Rate. Foreseen at 5.25% from previous 5.25%.
Above data could have a negative impact on the Pound.
Canada
At 7.05pm- Gov Council Member Gravelle Speaks.
Above data could have a neutral impact on the dollar
US
At 6.00pm-
Unemployment Claims. Data is foreseen at 212K from previous 209K.
Philly Fed Manufacturing Index. Data is foreseen at -2.6 from previous 5.2.
Current Account. Data is foreseen at -209B from previous -200B.
At 7.15pm-
Flash Manufacturing PMI. Data is foreseen at 51.8 from previous 52.5.
Flash Services PMI. Data is foreseen at 52.00 from previous 52.3.
At 7.30pm-
Existing Home Sales. Data is foreseen at 3.95M from previous 4.00M
CB Leading Index m/m. Data is foreseen at -0.1% from previous -0.4%.
At 8.00pm- Natural Gas Storage. Forecast 5B from previous -9B.
At 9.30pm- FOMC Member Barr Speaks.
Above data could have a volatile impact on the dollar
Commodity Samachar
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