Overnight, the Federal Open Market Committee (FOMC) left rates in the 5.25-5.50% range, as expected and has been the case since July. The Fed however did not rule out further hikes in acknowledging the unexpected resilience of the US economy, though in Fed Chairman Powell’s accompanying remarks in his presser he sent mixed messages and the market has interpreted them as an indication that the Fed is done with raising rates, noting financial conditions have tightened. The US-dollar has softened on the news and US rate futures have added to bets that the Fed is done for now. The Aussie dollar is up 0.8% for the day and has been challenging the resistance at 0.64-cents in its response to the news. Against the G10 majors, it has returned gains as well. On the local data front today, we look forward to the Trade Balance for September and the Home loan Value, also for September, to draw some attention. Asia equity markets should also be in focus for further AUD direction. Technically looking, support for the AUDUSD now emerges at 0.6345/50 zone, while further supply above 0.64-cents is expected to slow the advance, however a clear break would see gains to 0.6500/05. Trader attention now returns to the RBA meeting next week, where market bets are swinging for a quarter point hike from them.
Wall Street indices all jumped higher on the news that the US Fed had left rates unchanged and investors are betting that the committee is done with hiking. The DJI rose +0.7%, the S&P500 gains +1.0% and the Nasdaq closed up +1.6%. Australian shares are expected to follow Wall Street higher again today, after the Fed keeps rates unchanged as was widely expected.
Gold prices eased across the day in response to the announcement that the FOMC had left rates unchanged and Fed Chair Powell’s comments that rate cuts are not on their radar right now.
Copper prices on the LME held steady and in the black, even as investors remained cautious as to the demand outlook after China reported softer Manufacturing data than was expected. Iron Ore prices strengthened, as market sentiment firmed with positive signals from the latest of China’s financial meetings.
Brent Crude Oil prices eased slightly for the day, as market players digested the outcomes from ‘no rate change’ from the US Fed and the accompanying statements from Fed Chairman Powell in his subsequent presser.
Open today 0.6393
Yesterday’s Range 0.6319 / 0.6400
Open today 0.5846
Yesterday’s Range 0.5789 / 0.5858
Yesterday’s Range 1.0879 / 1.0948
Yesterday’s Range 0.5979 / 0.6059
Yesterday’s Range 4.6363 / 4.6929
Yesterday’s Range 0.5207 / 0.5267
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