Gold loses over 1% as investors seek riskier assets

“Even if you are on the right track, you’ll get run over if you just sit there.” —Will Rogers 

 

 

HEADLINES

 

 

• Dollar falls after Fed raises rates, forecasts future hike
• Gold firms while traders brace for U.S. Fed move
• Oil up 1% despite crude build, as dollar weakens ahead of Fed rate move
• S&P 500 rises slightly as Fed hikes rates by a quarter-point: Live updates
• Fed hikes rates by a quarter percentage point, indicates increases are near an end
• GBP/USD to retest its 1.2447/49 December and January highs – Credit Suisse
• EURUSD Short Term: Upside favored

 

Dollar falls after Fed raises rates, forecasts future hike

 

 

The dollar was lower on Wednesday following the U.S. Federal Reserve's decision to raise interest rates by a quarter of a percentage point as expected.

The Fed projected at least an additional interest rate increase of 25 basis points by the end of 2023.

The dollar index fell 0.465% at 102.680, with the euro up 0.62% to $1.0834.

The Japanese yen weakened 0.43% versus the greenback at 131.88 per dollar, while Sterling was last trading at $1.2288, up 0.57% on the day.

 

 

COMMODITIES

 

 

Gold firms while traders brace for U.S. Fed move

 

 

Gold gained on Wednesday as Treasury yields and the dollar slipped, while traders positioned for the U.S. Federal Reserve's interest rate announcement and Chair Jerome Powell's comments on monetary policy.

Spot gold rose 0.5% to $1,949.42 per ounce by 1:04 p.m. EDT (1704 GMT) after retreating 2% on Tuesday. U.S. gold futures were up 0.6% at $1,953.00.

The decision is expected at 2 p.m. EDT (1800 GMT), and the Fed is largely expected to increase rates by 25 basis points, according to the CME FedWatch tool, while some Wall Street banks are split over a hike or a pause.

 

 

ENERGY

 

 

Oil up 1% despite crude build, as dollar weakens ahead of Fed rate move

 

 

Oil prices rose about 1% to a one-week high on Wednesday despite a surprise weekly build in U.S. crude inventories, as the dollar slid to a six-week low ahead of the U.S. Federal Reserve's decision on interest rates which could affect the fuel demand outlook.

Brent futures rose 89 cents, or 1.2%, to $76.21 a barrel by 1:32 p.m. EDT (1732 GMT), while U.S. West Texas Intermediate (WTI) crude rose 77 cents, or 1.1%, to $70.44.

That puts both crude benchmarks on track for their highest close since March 14.

 

 

STOCKS

 

 

S&P 500 rises slightly as Fed hikes rates by a quarter-point: Live updates

 

 

Stocks ticked higher Wednesday after the Federal Reserve raised rates by a quarter of a percentage point, as was widely expected.

The Dow Jones Industrial Average traded 12 points higher, or 0.1%, while the S&P 500 advanced 0.2%. The Nasdaq Composite climbed 0.5%. The major averages were little changed heading into the announcement at 2 p.m.

Treasury yields dropped on the back of the announcement, with the 10-year rate trading 6 basis points lower at 3.541%. Gold futures, meanwhile, popped 1% to $1,958.90 per ounce.

 

 

Fed hikes rates by a quarter percentage point, indicates increases are near an end

 

 

The Federal Reserve on Wednesday enacted a quarter percentage point interest rate increase, expressing caution about the recent banking crisis and indicating that hikes are nearing an end.

Along with its ninth hike since March 2022, the rate-setting Federal Open Market Committee noted that future increases are not assured and will depend largely on incoming data.

 

 

ANALYSIS

 

 

GBP/USD to retest its 1.2447/49 December and January highs – Credit Suisse 

 

 

“GBP/USD is attempting to push above the 1.2270 mid-February high and downtrend from February 2022. We continue to look for a sustained break to clear the way for a fresh look at the 1.2447/49 YTD highs, where we would look for a fresh cap again. Should strength directly extend though we would see resistance next at 1.2668/1.2783 – the May 2022 high, 61.8% retracement of the 2021/2022 fall and long-term downtrend from May 2021.

“Support at 1.2009 now ideally holds to keep the immediate risk higher. A break can see a retest of the 200-DMA, currently at 1.1895.”

 

 

CHART

 

 

EURUSD Short Term: Upside favored

 

 

Technical View: Long position above 1.0722. Target 1.08. Conversely, break below 1.0722, to open 1.0702.

Comments: The pair hits resistance and reverses.

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

Footnotes
https://www.reuters.com/markets/currencies/dollar-steady-banking-crisis-fears-keep-investors-jittery-2023-03-27/
https://www.cnbc.com/2023/03/27/gold-inches-lower-on-steady-dollar-with-focus-on-banking-risks.html
https://www.cnbc.com/2023/03/27/oil-markets-steady-as-investors-weigh-banking-crisis-russia.html
https://www.reuters.com/markets/us/futures-edge-higher-svb-deal-soothes-bank-fears-2023-03-27/
https://www.cnbc.com/2023/03/27/us-treasury-yields-investors-weigh-banking-sector-developments-.html
https://www.fxstreet.com/news/eur-usd-gains-back-through-10785-to-give-a-bit-more-lift-scotiabank-202303271151