- 20th June 2019
- Posted by: Hakeem
- Categories: FOREX LATEST NEWS DAILY, FOREX MARKET ANALYSIS, FUNDAMENTAL ANALYSIS, TECHNICAL ANALYSIS
The Canadian dollar rose 0.67 percent on Wednesday after the US central bank is ready to go back to monetary policy easing with an upcoming interest rate cut. Trade optimism after Trump tweeted about his phone call with Chinese president Xi and lower rates in the US that could come as early as the July FOMC meeting put the greenback on the back foot.
The dollar is lower across the board against major pairs after the Fed delivered a dovish statement at the end of the June FOMC meeting. There was no interest rate cut, but the removal of the word patient from the language appears to be the first step towards a return to monetary policy easing.
OIL – Crude Rises on Inventory Drop and Dovish Fed
Crude prices rose on Wednesday after the Energy Information Administration (EIA) published the weekly US crude inventories report. Crude and gasoline inventories registered bigger drawdowns than expected and drove prices higher. US crude stocks fell by 3.1 million barrels and gasoline by 1.7 million barrels.
West Texas Intermediate rose 0.44 percent after the drop in inventories, with Brent rising 0.29 percent after the mixed signals sent by the Fed. The dollar could weaken further if economic indicators deteriorate in the short term building the case for a rate cut in July.
The OPEC+ has announced it will hold its ministerial meetings on July 1 and 2. The group’s production cut agreement has been he major stabilizing force for energy prices. The major factor to the downside has been the prolonged trade war between the US and China, but the G20 meeting at the end of June guarantees that crude traders will have lots of insights starting June 28.
GOLD – Yellow Metal Rises as Dollar Weakens after Dovish Fed
Gold is higher on Wednesday after the Fed held rates, but did turn up the dovish rhetoric in their monetary policy statement and press conference by Fed Chair Jerome Powell. The US central bank led major central banks in a move towards normalizing rates in 2018, but a slowdown in the economy could warrant a 180 degree turn and a return to lower rates. Powell used the Ben Franklin quote:”an ounce of prevention is worth a pound of cure” when asked about rate cuts, so overall the market is rating the Fed as mostly dovish.
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Source : MarketPlus