{"id":146875,"date":"2019-05-02T11:15:55","date_gmt":"2019-05-02T15:15:55","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=146875"},"modified":"2019-05-02T10:18:31","modified_gmt":"2019-05-02T14:18:31","slug":"fed-boe-keep-rates-on-hold-as-inflation-remains-weak","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/05\/fed-boe-keep-rates-on-hold-as-inflation-remains-weak\/","title":{"rendered":"Fed & BOE Keep Rates On Hold As Inflation Remains Weak"},"content":{"rendered":"
May 2, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

US Dollar Up<\/strong><\/h2>\n

Over the European morning on Thursday,\u00a0the US dollar strengthened once again.\u00a0<\/strong>It continued\u00a0its rally from yesterday in response to the\u00a0FOMC meeting which saw the Fed keeping rates on hold<\/strong>. The bank cited subdued inflation as the key driver for keeping policy at the current level. However, it did acknowledge a \u201csolid\u201d rise in economic activity which has fuelled USD buying, bringing the index back up to 97.39 last.<\/p>\n

EUR Stays Firm<\/strong><\/h2>\n

EURUSD has been a little higher against USD today.\u00a0<\/strong>This comes\u00a0despite USD strength as the market recovers some of yesterday\u2019s losses which saw price trading back down towards the 1.1175 level. Eurozone PMI data sets this morning from France and Germany came in mixed. However, EUR has seen some buying. This is due to stronger than expected eurozone manufacturing PMI, despite the reading still being on the contractionary territory.<\/p>\n

BOE Keeps Rates on Hold<\/strong><\/h2>\n

GBPUSD has traded a little lower against USD today. The BOE kept rates on hold once again citing\u00a0Brexit uncertainty as the main obstacle to raising rates<\/strong>.\u00a0 The bank noted that inflation continues to run just below target. However, again, the BOE forecasts that if the economy develops in line with its projections, further tightening in monetary policy will be necessary. Though this, of course,\u00a0depends on the outcome of Brexit<\/a>. \u00a0Despite the decline, GBPUSD remains above the 1.30 level keeping focus on further upside for now.<\/p>\n

Rally in Risk<\/strong><\/h2>\n

Risk sentiment is staging a recovery today following the<\/strong>\u00a0weakening seen yesterday in response to the FOMC meeting which sparked USD buying. With optimism around a potential US\/China trade deal continuing to keep equities supported, the current dip below the 2939.87 level is likely to provide a good buying opportunity for bulls looking to reload positions.<\/p>\n

Safe Havens Down<\/strong><\/h2>\n

The recovery in risk sentiment today, along with a firmer US dollar, has weighed on the safe havens with\u00a0both JPY and gold down against USD<\/strong>. XAUUSD is moving back towards the 1266.54 level support as the prospect of Fed rate hikes later in the year re-emerges. USDJPY has turned higher today also, trading 111.48 last as price failed to test the 110.86 support, putting focus on a move back up to 112.12.<\/p>

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Crude Capped By Bearish EIA Report<\/strong><\/h2>\n

Oil prices have been lower again today<\/strong>\u00a0over the European morning following the latest weekly EIA report. The report yesterday showed a large, unexpected increase in US crude stocks.\u00a0US inventories rose by 9.9 million<\/strong>\u00a0barrels last week which, along with record high US crude production, is keeping price weighted. Crude is now trading below the rising trendline from last year\u2019s lows. However, for now, it\u2019s still above the 61.89 level support.<\/p>\n

Commodity Currencies Recovering Against USD<\/strong><\/h2>\n

Despite the weakness in oil prices and the strength in USD today,\u00a0USDCAD has traded lower<\/strong>\u00a0with price retreating further following yesterday\u2019s test of the 1.3467 level resistance. Canadian manufacturing data yesterday came in weaker than expected with the sector still below the neutral level on the PMI index.<\/p>\n

The Australian dollar<\/a>\u00a0is slightly higher too<\/strong>\u00a0against USD today despite the stronger US dollar. Optimism around a US\/China trade deal materializing in the coming weeks is keeping risk sentiment buoyant. AUDUSD is now fighting to stay above the .7021 level which it is currently challenging.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex US Dollar Up Over the European morning on Thursday,\u00a0the US dollar strengthened once again.\u00a0It continued\u00a0its rally from yesterday in response to the\u00a0FOMC meeting which saw the Fed keeping rates on hold. The bank cited subdued inflation as the key driver for keeping policy at the current level. However, it did acknowledge a \u201csolid\u201d […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-146875","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/146875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=146875"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/146875\/revisions"}],"predecessor-version":[{"id":146880,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/146875\/revisions\/146880"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=146875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=146875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=146875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}