It was widely expected that Fed will keep the rates lower for longer duration and it did so. Fed signaled lower rates until at-least 2023 with 17 officials favored to keep near zero at least through next year and rest 13 officials projected for the same till end of 2023. What is notable that Fed sounded slightly hawkish which weigh most of the G10 currencies to slide against Dollar?
Admittedly Fed tweaks the outcome of its inflation targeting strategy review into present policy and at the same time prevented to send any additional dovish signals including to avoid any concrete guidance on asset purchases. Overall we can say because markets were heavily short in dollar before the Fed meet and after the announcement, a slight trim dollar short lifted Dollar Index higher.
US Stocks End Mostly Down
The US stocks closed mostly lower after reversing gains late in the day on Wednesday, 16 September 2020, with broader Nasdaq and S&P 500 both diving in the red territory, as mixed data kept investors on edge on concerns about the pace of an economic recovery as latest figures showed U.S. consumer spending slowed in August, with a key retail sales gauge unexpectedly declining. However, market losses capped after Federal Reserve statement that stoked optimism it would keep U.S. interest rates near zero for a prolonged period.
The Federal Reserve policymakers ended their two-day policy meeting on Wednesday by keeping interest rates steady. The Fed also changed its forward guidance to reflect its more dovish stance on inflation, signalling that its benchmark interest rate could remain near zero until inflation is on track to moderately exceed the U.S. central bank’s 2% target for some time.
US Retail Sales Up 0.6% In August- US retail sales rose by 0.6% in August after climbing by a downwardly revised 0.9% in July, according to a report released by the Commerce Department on Wednesday. Excluding sales by motor vehicles and parts retailers, retail sales climbed by 0.7% in August after leaping by a downwardly revised 1.3% in July. Ex-auto sales were expected to increase by 0.9% compared to the 1.9% spike originally reported for the previous month.
US Business Inventories Register Modest Increase In July–US business inventories inched up by 0.1% in July after slumping by 1.1% in June, a report released by the Commerce Department on Wednesday showed. The modest rebound in business inventories came as retail inventories jumped by 1.2% in July after tumbling by 2.7% in the previous month. On the other hand, the report showed wholesale and manufacturing inventories fell by 0.3% and 0.5%, respectively. The Commerce Department also said business sales surged up by 3.2% in July after soaring by 8.6% in June. Manufacturing and wholesale sales both spiked by 4.6% during the month, while retail sales rose by 0.5%.
TREND : WEAK BEARISH
Time : 17/09/2020
Pivot : 1.1791
Technical View : LONG ABOVE 1.1811
Target : 1.1831, 1.1861, 1.1941, 1.1995
Technical View : SHORT BELOW 1.1771
Target : 1.1751, 1.1685, 1.1641, 1.1551