Market Roundup
•US Building Permits (Aug) 1.475M ,1.410M forecast, 1.406M previous
•US Building Permits (MoM) (Aug) 4.9% , -3.3% previous
•US Housing Starts (MoM) (Aug) 9.6% , -6.9% previous
•US Housing Starts (Aug) 1.356M, 1.310M forecast, 1.237M previous
•Canada Foreign Securities Purchases (Jul) 10.98B ,- 5.20B previous
•Canad Foreign Securities Purchases by Canadians (Jul) 4.450B ,- 16.350B previous
•Canad Atlanta Fed GDPNow (Q3) 2.9%, 3.0% forecast, 3.0% previous
•US Crude Oil Inventories -1.630M, -0.200M forecast, 0.833M previous
•US Fed Interest Rate Decision 5.00%, 5.25% forecast, 5.50% previous
Looking Ahead Economic Data(GMT)
•No Data Ahead
Looking Ahead Events And Other Releases(GMT)
•No Significant Events
Currency Summaries
EUR/USD: The euro declined on Wednesday as the dollar rebounded from an earlier drop following the Federal Reserve's significant interest rate cut, which had largely been anticipated by markets. The U.S. central bank began its monetary easing cycle with an unusually large half-percentage-point reduction. Chair Jerome Powell indicated that this move was intended to reaffirm policymakers' commitment to maintaining low unemployment now that inflation has eased. While the size of the move had been anticipated by investors in part due to a slew of media reports pointing in that direction ahead of the decision, it defied the expectations of economists polled by Reuters, who were leaning toward a 25-basis-point cut Immediate resistance is noted at 1.1142 (23.6%fib), with a breakout potentially pushing the pair towards 1.1191 (Higher BB). On the downside, immediate support is at 1.1075 (Sep 16th low), a drop below this level could lead the pair towards 1.1000 (Psychological level).
GBP/USD: The British pound weakened against the dollar on Wednesday after the U.S. Federal Reserve implemented a significant cut in borrowing costs—the first adjustment in over four years. The central bank reduced the overnight rate by half a percentage point, exceeding the usual quarter-point change, citing increased confidence that inflation will continue to decline toward its 2% annual target. Fed policymakers projected that the benchmark interest rate would decrease by another half percentage point by the end of this year, a full percentage point next year, and half a percentage point in 2026, although they acknowledged that the long-term outlook is inherently uncertain. Sterling fell 0.11% to $1.3199 after scaling a peak of $1.3298 in the previous session, its strongest level since March 2022. Immediate resistance can be seen at 1.3220(23.6%fib), an upside break can trigger rise towards 1.3256(Higher BB).On the downside, immediate support is seen at 1.3121(38.2%fib), a break below could take the pair towards 1.3033(61.8%fib).
AUD/USD: The Australian dollar retreated slightly on Wednesday as the dollar strengthened after the Federal Reserve announced a half-percentage-point interest rate cut, citing increased confidence that inflation will continue to decline toward the central bank's 2% annual target. The Fed reduced the overnight rate to a range of 4.75%-5.00% and projected further decreases: another half percentage point by the end of this year, a full percentage point in 2025, and a final half percentage point in 2026, ending in a 2.75%-3.00% range. Although the dollar initially traded lower after the Fed's announcement, it regained ground following Chair Jerome Powell's press conference. Immediate resistance can be seen at 0.6801(23.6%fib), an upside break can trigger rise towards 0.6861 (Higher BB).On the downside, immediate support is seen at 0.6742 (Sep 17th low), a break below could take the pair towards 0.6704 (38.2%fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday after the Federal Reserve cut interest rates by half a percentage point. The Fed initiated what is anticipated to be a consistent easing of monetary policy with a larger-than-usual reduction in borrowing costs, prompted by increasing concerns about the job market's health. This rate decision could pave the way for a quicker easing by other major central banks, making it more likely that the Bank of Canada will implement a similarly sized cut at its upcoming October meeting. Investors now see a 59% likelihood that the Canadian central bank will ease by 50 basis points in October, an increase from 46% prior to the Fed's decision. The central bank has already cut rates three times since June, each time by a quarter-point. Immediate resistance can be seen at 1.3640 (50%fib), an upside break can trigger rise towards 1.3696 (61.8%fib).On the downside, immediate support is seen at 1.3585 (38.2%fib), a break below could take the pair towards 1.3519(23.6%fib).
USD/JPY: The dollar made a strong comeback on Wednesday as traders absorbed a significant interest rate cut from the Federal Reserve, which lowered borrowing costs for the first time in over four years. The U.S. central bank reduced the overnight rate by half a percentage point, exceeding the typical quarter-point adjustment, citing increased confidence that inflation will continue to decline toward its 2% annual target. This half-percentage-point cut was a clear signal that the Fed is committed to protecting the labor market and steering the economy away from any potential recession. Top of FormBottom of FormStrong resistance can be seen at 144.23 (50%fib), an upside break can trigger rise towards 145.00 (psychological level). On the downside, immediate support is seen at 143.14(38.2%fib), a break below could take the pair towards 141.64(23.6%fib).
Equities Recap
European shares closed lower on Wednesday after the U.S. Federal Reserve began its easing cycle with a large rate cut.
UK's benchmark FTSE 100 closed down by 0.68 percent, Germany's Dax ended down by 0.08 percent, France’s CAC finished the day down by 0. 57 percent.
Major stock indexes closed with modest losses in choppy trading on Wednesday after the U.S. Federal Reserve opted for a supersized cut in its first move to borrowing costs in more than four years.
Dow Jones closed down by 0.25 percent, S&P 500 ended down by 0.29 percent, Nasdaq finished the down by 0.31 percent.
Commodities Recap
Oil prices fell in on Wednesday after a larger-than-expected Federal Reserve interest rate cut sparked concerns about the U.S. economy
Gold struggled for momentum on Wenesday as market participants digested Federal Reserve Chair Jerome Powell's comments after the U.S. central bank delivered a super-sized rate cut.
Spot gold was little changed at $2,558.00 per ounce . Bullion rose to a record high of $2,599.92 on Wednesday before closing lower.U.S. gold futures fell 0.6% to $2,582.70
