Financial Markets Update: September 19, 2024
In today’s financial markets, volatility remains high following significant fluctuations in the American session on Wednesday. Here are the key highlights and events to watch out for:
Bank of England Monetary Policy Decision
- The Bank of England (BoE) will announce its monetary policy decisions during European trading hours.
- Analysts expect the BoE to maintain the policy rate at 5%, but changes in the policy statement and vote split could impact investor sentiment.
US Economic Calendar
- The US economic calendar will feature:
- Weekly Initial Jobless Claims
- August Existing Home Sales
- September Philadelphia Fed Manufacturing Survey data
Federal Reserve Policy Decision
- After a two-day policy meeting, the Federal Reserve (Fed) announced a 50 basis points rate cut to a range of 4.75%-5%.
- The Fed’s revised Summary of Economic Projections (SEP) indicated expectations of two more 25 bps rate reductions in the remaining meetings of the year.
Currency Market Update
US Dollar Performance This Week
- The US Dollar (USD) was the weakest against the Australian Dollar, with a percentage change of -1.70%.
- Check the heat map below for a comprehensive view of USD performance against major currencies.
Market Reactions
- The USD Index initially saw a heavy selloff post-Fed decision, but later staged a rebound to close flat.
- Chairman Jerome Powell emphasized Fed’s flexibility in responding to economic conditions in the post-meeting press conference.
Major Currency Pairs
- GBP/USD: Trading around 1.3250 after erasing gains from its two-year high near 1.3300.
- AUD/USD: Climbed to a 2024-high above 0.6800 following positive Australian Employment Change data.
- EUR/USD: Rose towards 1.1150 on Thursday due to USD selling pressure.
- USD/JPY: Reversed direction after hitting a two-week high, trading near 142.20.
- Gold (XAU/USD): Reached a new all-time high of $2,600 before retracing, currently up over 0.7% near $2,580.
In summary, today’s financial landscape is dynamic and influenced by central bank decisions, economic data releases, and currency movements. Stay informed and watch out for market developments that could impact your investment decisions and financial future.