ICM, the leading London-based FX and CFDs provider, reported that the greenback was softer on Tuesday as market participants await the Federal Reserve interest rate decision.
The dollar index which measures the greenback against a basket of major currencies settled lower at 94.14 despite the high expectations of a rate hike today. The Federal Reserve is widely expected to raise interest rates by 25 basis points for the third time this year. The dollar strengthened against major rivals throughout the year, supported by the hawkish interest rate outlook. The Fed Chairman Jerome Powell will hold a press conference after the decision. The chairman will likely address the effects of a full-blown trade war with China on the United States economy, and the interest rate path. The dollar was weaker against the British pound and the Euro on growing expectations of a Brexit deal and the hawkish tone of the European Central Bank president Mario Draghi on Monday. As per ICM trading platform, the GBPUSD rose to a high of $1.3194, and the EURUSD is trading at a high of $1.1770.
Wall Street finished mostly lower due to the anticipated rate hike. As per ICM trading platform, the Dow Jones Industrial Average lost 0.3% to 26492, the SPX500 fell 0.1% to 2915, whereas the Nasdaq Composite gained 0.2% to 8007. Major U.S. indices will be vulnerable to further rate hikes by the Federal Reserve and escalating trade tensions.
Gold prices remain stuck in a tight trading range between a support zone near $1188 and a resistance zone near $1214. On the other hand, the silver ounce traded at a four-week high of $14.56. The XAU/XAG ratio fell to a low of 82.63 from a ten-year peak of 85.20.
Oil prices ended mixed as the Trump administration is trying to assure investors that the oil market will be well supplied. The Institute of International Finance reported that the Iranian oil exports dropped by 800 thousand barrels since April. As per ICM trading platform, the West Texas Intermediate crude futures settled at $72.05, and the Brent futures settled at $81.47. The Energy Information Administration will report the official crude inventories later today.