At the two-day meeting the US Federal reserve left interest rates unchanged. The main interest rate remained at the level of 0.5%. This decision was announced yesterday at 21:00 (GMT+3). Although the Fed indicated that there were grounds to raise interest rate before the end of this year, many investors do not believe that it would be possible. According to the negative forecast, interest rate in the USA will be raised no earlier than mid-2017, and once again at the end of 2017.
Unsteady American economy, problems in the global economy, including slowdown of Chinese economy and Brexit will prevent monetary policy tightening in the near future.
In response to yesterday's decision the USD fell in the currency market, while gold and US stock indexes went up.
At the end of trading on Wednesday Dow Jones Industrial Average rose by 0.9%, S&P500 rose by 1.1% and Nasdaq Composite- by 1% to 6295,18, which was a record closing level. The USD index WSJ, which shows positions of the USD against a basket of 16 currencies, fell by 0.7%. The index Nasdaq100 including 100 largest U.S. and international nonfinancial companies, listed on the Nasdaq stock exchange, has grown by 1.1% yesterday with the closing price at the level of 4851.0. Today, the rise in the US stock indices continues as well as the decline in the USD.
Today’ news will be as follows: at 15:30 (GMT+3) weekly data on the initial applications for unemployment benefits in the USA, at 16:00 US housing price index for July will be published. At 16:00 ECB President, Mario Draghi will deliver his speech. Traders need to be careful when trading in the market in the period of Draghi’s speech, as he is famous for making comments, which change movement direction in the financial markets. At 16:30 Deputy head of the Bank of England on the financial stability, a member of the monetary policy Committee (MPC) John Cunliffe will make his speech and at 20:00 – Governor of the Bank of England Mark Carney will deliver his speech.
Market volatility can increase during these periods of time.