FOREX
The US dollar hit a four-month low during early Thursday trading as the markets reacted to developments at the latest Federal Reserve meeting. While there had been some persistent doubts about the Fed's interest rate hikes, it has now become clear that the current cycle is over. Investors now want to know when the central bank will start cutting rates and how fast they will come down. Speaking at the end of the two-day meeting, Jerome Powell began to lift the veil over the likely path for rates in 2024. This development was welcomed by the financial markets, dissipating some of the doubts that had been capping risk appetite. Treasury yields fell, as did the US dollar, as investors priced in expectations of a rate cut as early as March, in a dynamic that may lead to further losses for the greenback.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Equities jumped higher in Europe on Thursday after the Federal Reserve reignited a bullish push. Meanwhile, traders are preparing for a series of monetary decisions in Europe later today.
The FOMC meeting delivered what equity and treasury traders were hoping for yesterday evening after Fed Chairman Powell confirmed the next monetary moves will be towards cutting borrowing rates, signalling the start of the easing cycle.
The news immediately impacted a wide range of assets, with sharp bullish price actions on global equities as traders cheered on a more dovish approach from central banks.
That said, all eyes are now shifting to Europe, with investors bracing for more decisions on rates from the ECB, BoE and SNB today. If those institutions were to echo the dovish semantics provided by the Fed yesterday, we could expect another solid reaction from financial markets, driving market sentiment on equities even higher.
The STOXX-50 index now trades well above its former resistance level (4,550.0pts), with all sectors in the green, while real estate and basic materials are registering the best performance so far.
The next key technical point can be located towards 4,610.0pts, which is seen as both a short- and mid-term crucial resistance.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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