The EUR/USD and GBP/USD experienced the biggest gains leading into the New York closing as a result of the expected 75 basis point increase by the Fed. In Asia, the Japanese Yen has increased the most in value relative to the US Dollar.
The summary of economic predictions (SEP) from last month were unaffected, according to comments made by Fed Chair Jerome Powell following the decision. He asserted that the US is not experiencing a recession and that any further increases will be determined by numbers.He left open the possibility of a further 75 bps increase, but the Fed will not provide forward guidance on rate changes.
Treasury rates softened out the curve to 10-years due to the projected slowdown in the rate hike trajectory, though notes past a certain point gained a few bps. The Dow, S&P 500, and Nasdaq all experienced explosive gains during the cash session, rising 1.37%, 2.62%, and 4.06%, correspondingly, while futures are lower at present.
Except for Hong Kong’s Hang Seng Index, APAC equity indices are marginally positive. Under 1% of it is lower. As anticipated, the Hong Kong Monetary Authority (HKMA) increased rates by 75 basis points to keep pace with the increase of the Federal Reserve.
The weaker currency helped crude oil rise, and inventory figures also helped. The strategic petroleum reserve’s stocks decreased by 4.5 million barrels, according to the Energy Information Administration (EIA). The reserve now stands at 422 million barrels, which is a smaller drop than expected.
During the Asian session, commodities have been trending upward overall. The most notable example is iron ore, which had a strong run and once increased by more than 5%. The price of gold per ounce is close to US$1,736.
Only after German CPI results are released on Thursday, attention will turn to US GDP data, in which the market anticipates annual growth of 0.5% in Q2. Additionally, the market anticipates the quarterly PCE data to show an increase of 4.4% QoQ in the three-month period that ended last month. This is the primary metric for price growth used by the Federal Reserve.
The 3-week low of 106.11, which may serve as support, was reached overnight by the USD (DXY) index, but it could not drop underneath it. The breakpoint of 105.59 might offer assistance under that.
The 10-day Simple Moving Average appears to be on the verge of crossing underneath the 21-day Simple Moving Average. This would result in a Death Cross and may signify that bearish momentum is starting to build. On the upside, resistance might be found at the high of 107.43 marked on Wednesday.