INGOT Brokers Australia | Fundamental report (2017-06-15)

Fundamental report (2017-06-15)

Overview

The dollar started Wednesday’s trading session with huge loses reaching its lowest levels since November.9 driven by the weak U.S inflation and retail sales figures, however these loses were trimmed after the Federal Reserve decision to hike interest rates for the second time in this year by 25 basis points as expected.

Markets were shocked in the early trade after the unexpected fall in the consumer price index and the drop in the U.S retail sales in May reaching its biggest drop in 16 months, however the dollar rebounded after the FED decision to raise interest rates coupled with a hawkish tone for another increase in interest rates this year.

The two year US Treasury note which is considered very sensitive to the monetary policy decisions was down 2 basis points, having been 6 basis points lower just before the Fed statement was released, also the 10-year yield was down 6 basis points at 2.14 per cent, after touching 2.10 per cent soon after the release earlier in the day of weak US inflation figures.

Furthermore, the Sterling was pressured by the UK’s jobless rate which stayed at its previous levels at 4.6%, also the wage figures came below expectations, however the British pound remains at its previous levels between the $1.26 and $1.28 even after the FED interest rate hike, but today’s BOE interest rate decision could give some uncertainty to the sterling.

Moreover, the euro reached its highest levels against the dollar since Nov. 9, however these numbers were rebounded after the FED decision to raise the interest rates by 25 basis point, to close at $1.1215.

Additionally the greenback fell against the Japanese Yen by 0.35 percent to trade at 109.70 yen, after reaching its lowest levels since April.

Finally, the U.S equities closed Wednesday’s trading session in mixed territories with the Dow Jones Industrial Average edging up 46.09 points, or 0.22 percent, to end at 21,374.56, while the S&P 500 lost 2.43 points, or 0.10 percent, to 2,437.92 and the Nasdaq Composite dropped 25.48 points, or 0.41 percent, to 6,194.89.

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