Dollar decreasing after FED meeting

20 December, 2018

The US dollar fell against a basket of major currencies after the Fed meeting. Yesterday, the regulator raised the interest rate at 25 basis points to 2.50%, as experts expected. However, investors were disappointed by the news that the planned number of rate increases in 2019 was reduced from three to two. Also, Fed Chairman, Jerome Powell, noted that the volatility of the financial market increased, and inflation at the end of the year was more restrained than expected. Therefore, in his opinion, reducing the number of rate increases will support the economy. The dollar index (#DX) closed in the negative zone (-0.11%) yesterday.

Yesterday, economic data from the UK, Canada, the US, and New Zealand was also published. Thus, the consumer price index in the UK counted to 2.3% in November, as the experts forecasted. The core consumer price index in Canada fell in November to -0.2%. Existing home sales in the US rose to 5.32M in November and were better than the forecasted 5.20M. New Zealand's GDP counted to 0.3% in the third quarter instead of 0.6%. Today we recommend paying attention to the news feed of the UK and the US.

The "black gold" prices have risen after the publication of the report on crude oil inventories in the United States. At the moment, futures for the WTI crude oil are testing the mark of $47.10 a barrel.

Market Indicators

Yesterday, aggressive sales were observed in the US stock market: #SPY (-1.50%), #DIA (-1.66%), #QQQ (-2.46%).

The 10-year US government bonds yield has continued to decline. Currently, the indicator is at the level of 2.75-2.77%.

The news feed on 20.12.2018:

  • The volume of retail sales in the UK at 11:30 (GMT+2:00); 
  • Bank of England interest rate decision at 14:00 (GMT+2:00); 
  • Philadelphia Fed manufacturing index in the United States at 15:30 (GMT+2:00).

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