Investors are watching closely: Will the Fed deliver a hawkish signal, or hint at dovish options?

Frank Walbaum

Important News for the day

Wed., 18th, 08:00 CET UK Consumer Price Index.
Wed, 18th, 14:30 CET US Unemployment Claims.
Wed, 18th, 20:00 CET US Federal Funds Rate.
Wed, 18th 20:30 CET US FOMC Press Conference.

TikTok US

The social media platform TikTok can still be used in the USA. For the third time, the US government has extended the use of the platform by a further 90 days. US President Trump will sign a decree in the next few days that will allow the Chinese company Bytedance to continue offering its services to US customers. It is alleged that the Chinese government has access to users' data and can therefore spy on American citizens. The US government continues to claim that the platform must be sold to a US company to prevent its use from being banned in the future.

Market talk

The strength of the Dollar seems to continue. Today’s FOMC interest rate decision might offer more momentum for the Greenback if rates are not being cut. The Dollar could gear up steam causing the GBP and AUD in particular to weaken. This might in turn also cause equities to push lower. The Nasdaq index might face negative momentum due to the potentially stronger USD. Furthermore, markets and hence valuations have been rising already quite substantially so far this after the recent correction earlier on. Worth noting that oil prices continue to push higher again and so does the
Silver market. The rising demand could hence also be a sign of fresh strength in the economy in general.

Tendencies in the markets

Equities sideways, USD stronger, Bitcoin sideways, ETH sideways, oil positive, Silver positive, Gold weaker, JPY weak.

Author

Frank Walbaum

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.