The US Federal Reserve raised interest rates by 25 bps from 5.00% to 5.25% on Wednesday as expected. In addition, the central bank hinted at a potential pause in its rate-hiking campaign, however, rate cuts remain unlikely as FED chair Powell, said that future monetary policy decisions will be data-dependent. Therefore, investors remain confused and will have to wait for more guidance in the coming weeks.
Looking at market reaction, all major US stock indexes closed lower following FED’s meeting. The Dow retreated by 0.8%, the S&P500 shed 0.7% while the Nasdaq lost 0.5%. In the meantime, the US Dollar fell against major currencies. Moreover, Gold spiked higher as investors turned to safe havens. On the opposite, oil prices faced heavy selling pressure.
As of today, all eyes will be on the European central bank monetary policy meeting as it is expected to raise interest rates from 3.50% to 3.75%. In the US, initial jobless claims are due to rise from 230K to 240K.
Below, we will be analyzing the latest price action developments in the major currency pairs alongside gold.