Fed Announcement Finally Disappoint the Forex Market and USD Rises
After losing ground for the fourth consecutive day, U.S. stocks ended on mixed note as Fed unchanged the rates and lowered its growth prediction.
After four-day gaining streak, U.S. stocks ended the day on mixed note as Federal Reserve unchanged the rates and lowered its growth forecast. The Dow and the S&P drifted 0.10 percent and 0.17 percent lower, while the NASDAQ succeeded to stay in positive territory. Actually, despite extending its operation twist by $267 billion, the Fed left the rates unchanged and revealed no signal for another stimulus, disappointing market players all over the global. Meanwhile, Federal Reserve cut 2012 gross domestic product growth to 1.9 percent to 2.4 percent from 2.4 percent to 2.9 percent in April. Furthermore, Bernanke said the jobs market had lost some steam, prompting some investors to liquidate long positions on the equities.
After regaining 1.27 on Merkel’s remarks over bond buying via EFSF, the currency pair EUR/USD was unable to retain earlier gains as Spain prepared to auction bills today amid fears that the European debt crisis is deepening. The euro fell to 1.2665 from 1.2710, signaling more downward momentum. As is known, the Fed disappointed investors by leaving the rates unchanged.
Gold for August delivery settle at $1,615.80 an ounce as Federal Reserve remained its ongoing stance and the dollar gained ground, spurring investors to sell commodities across the board.
Today, we will pay close attention to weekly jobless claims, existing home sales, Philly Fed survey, FHFA house price index and leading indicators in succession.
- Worsening Crisis in Greece and Spain Pushed the EUR/USD Below 1.3000 (1.000)
- Forex Traders Still Need to Focus on the Political Development in Greece and Spain (1.000)
- Greece Failed to Form a New Government, Pushing the Euro Fall for the Second Week (1.000)
- Potential Euro Exit by Greece Hit the Euro Fall against USD again (1.000)
- Deepening Greek Government Crisis Brings Constant Damage to both Euro and Gold (1.000)