Market participants will largely focus on the BoE Interest Rate Decision due to be released at 11:00 GMT this morning and it is probably the biggest topic of the day. Will the BoE keep rates on hold as expected? The outlook may say so but some traders have already stacked up Shorts on the Pound as they think that a possibly hard Brexit on the horizon might cause the Bank to lower rates sooner rather than later
The Fed Delivers a Hawkish Cut
Elsewhere, the dollar remained supported after the U.S. Federal Reserve cut interest rates, as expected, but offered mixed signals about future easing, remaining hawkish for the most part. Specifically, Powell commented that there will be no easing cycle now and also stated on the repo issue "could happen but has no impact on financial stability". A further cut is expected from the bank but was denied hence the USD gained some momentum towards the end of the session.
Forex Preview: NOK Set to Break Higher?
The Norges Bank will possibly raise interest rates soon and we could see the NOK strengthen today. Elsewhere, weak employment figures hit the AUD while the JPY rose after the Bank of Japan also met expectations by holding off on deeper monetary easing.
Oil Prices Settle, Gold Lower
Meanwhile, oil prices settled after days of turbulence, after Saudi Arabia’s pledge to restore full production by end-September at facilities that were knocked out in drone and missile attacks last weekend. Elsewhere spot gold steadied after plummeting by as much as 1% yesterday on market uncertainty over how hawkish the Federal Reserve would be. A solid greenback will keep gold subdued for now, unless we have unexpected developments on the US/China or US/Iran front.
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