Daily wrap up – 21 September

21 Sep 2017 06:44 PM

The markets absorbed the Fed's decisions yesterday, US stocks started to fall from historical highs and the US dollar saw some slight declines after rising overnight after the Federal Reserve kept interest rates unchanged at 1.25% and left the door open for a third raise this year.

The Fed also announced a cut of nearly 4.2$ trillion, the size of its US Treasuries and mortgage-backed securities, starting in October. Although interest rates were maintained, the Federal Reserve indicated improved labor market conditions, growth in business investment and moderate economic growth.

Markets priced rates hike in December by about 70% from 50% ahead of yesterday's meeting, according to FedWatch. At the press conference, Yellen pointed out that the fall in inflation this year remains a mystery, adding that the Fed is ready to change interest rate outlook if necessary.

The dollar index fell since the beginning of trading today from its highest level throughout the week at 92.47 to currently trading at levels of 91.97.

On the other hand, early in the morning the Bank of Japan kept its monetary policy unchanged by keeping interest rates in the negative range as well as maintaining the monetary base to buy government bonds at a monthly rate of 80 trillion yen to keep the yield curve near zero levels. The decision helped strengthen the US dollar against the Japanese yen as the USDJPY stabilized near its two-month high of 112.30 / 70.

Oil prices fell during today's trading and erased their gains before the oil producers' meeting, which may extend the period of production cuts in the hope of eliminating the surplus oil supply, which disappointed the markets over three years. the failure of crude oil to stabilize the highest resistance level strong at 50.80 dollars pushed prices to be traded within the sideways channel at levels of 50.03$ before rising again near the resistance level.

Gold was clearly affected by yesterday's Fed meeting as it fell strongly below the strong support level at 1,300$ to its lowest level in almost a month at 1288.08$ per ounce, and with its below levels of 1300 still likely to continue to decline targeting 1275$  per ounce.

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