Forex market keeps being dominated by the US Dollar (USD) during Thursday’s session as traders searched solace in the Federal Reserve’s not-so-dovish rate-cut. The US Federal Reserve announced its first rate cut, of 0.25%, since 2008 financial crisis but poured cold water on the face of policy bears as the Chairman Jerome Powell turned down the prospects of the start of the broad easing cycle.
With this, the greenback surged across the board, even ignoring the US President Trump’s early-day criticism of the Fed’s policy. The resultant flow took the funds off from Asian stocks while also fuelling the US Treasury yields.
EUR/USD and GBP/USD dropped to fresh multi-month lows, while USD/JPY surged to 9-week high and Gold also visited a fortnight low despite political pessimism surrounding Iran and North Korea.
Global traders now brace for the Bank of England monetary policy meeting that is up for publishing quarterly inflation report at 11:00 GMT. Although major market players anticipate the UK central bank to maintain a hawkish tone with no policy change, looming Brexit uncertainty might not allow the Carney and Company to avoid uttering chances of future rate cuts.
For the European session start, Markit Manufacturing Purchasing Managers’ Index data for the Eurozone and the UK can entertain traders ahead of the BOE. The manufacturing gauges are up for publishing at 08:00 and 08:30 GMT respectively.
Furthermore, the US Manufacturing PMI data from Markit and ISM coupled with weekly jobless claims could make traders busy during the post-BOE trading hours.
Oil prices fell more than $1 on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of rate cuts and Sino-U.S. trade talks ended without progress.