ICM, the leading London-based FX and CFDs provider, reported that the US dollar rose after the FOMC decision as the FED affirmed the solid growth of the United States Economy. On the other hand, stocks were under pressure due to the renewed trade tensions between China and the United States.
U.S. stocks finished the session mostly lower on Wednesday as Trump proposed to raise tariffs to 25% from 10% on $200 billion of Chinese imports. President Trump is increasing tariffs to force China to change its behavior, and he remains open to further negotiations. The depreciation of the Chinese Yuan by more than six percent since mid-June to offset the effects of the 10% tariffs could be another reason for raising tariffs as Trump commented two weeks ago about the falling Yuan and the strong US dollar. As per ICM trading platform, the Dow Jones Industrial Average ended lower at 25333 and SPX500 settled at 2813. The weakness continued during the Asian session, the Dow Jones traded at a one-week low of 25203 and SPX500 reached a low of 2804. The global stock market remains vulnerable to any development regarding trade disputes.
ICM highlighted that the dollar index which measures the strength of the greenback against a basket of major currencies traded near a two-week high after the upbeat assessment of the United States economy by the Federal Reserve. The Fed stated that the economic activity rose at a strong rate and the household spending has grown strongly. Moreover, the Fed expects further rate hikes as long as the inflation is near the target.
The British Pound tumbled to a two-week low against the United States dollar ahead of the Bank of England interest rate decision. Market participants expect the BoE to raise interest rates from 0.50% to 0.75%. However, the bank is expected to address two concerns which are the weaker-than-expected wage growth and the Brexit. As per ICM trading platform, the GBPUSD traded at a low of $1.3068 as the European session started.
Gold prices posted the lowest daily close in more than a year as the robust economic outlook of the United States suggests further rate hikes by the Federal Reserve. As per ICM trading platform, the gold ounce tumbled from $1222 to trade at a low of $1216. On the other hand, the Silver Ounce is trading near $15.40.
Oil prices tumbled for the second consecutive day amid rising US crude oil inventories. The Energy Information Administration reported that the weekly crude oil inventories rose by 3.803 million barrels last week. As per ICM trading platform, Crude futures traded at a low of $67.30 and the Brent futures reached a two-week low of $72.13.