U.S. Fed raises interest rates

The U.S. Federal Reserve said it would raise interest rate by 0.25 percent from a range of 1 to 1.25 percent, its second rise for this year and the highest level since 2008. Fed’s Chair, Janet Yellen, stated that this decision “reflects the progress the economy has made and is expected to make.” The Fed also provided a clear picture of its plan of how to reduce its balance sheet. The U.S. economic growth is fundamentally at 2 percent and employment rate remained at a 4.6 percent low.

source: theguardian, The National Pulse

European indices are expected to open lower today, the FTSE 100 was down at 7,468 points, while the German DAX is set to open by 17 points lower. A panoply of events shall take place in the U.K. today, starting with retail sales for May which is due at 08:30 GMT. After the Fed, it is now the Bank of England’s turn to communicate its Interest Rate Decision at 11:00 GMT today and this can hugely impact trends of the pound sterling.

Earlier today, the Swiss National Bank (SNB) will present its Interest Rate Decision at 07:30 GMT and it will also hold a press conference at the same time. Otherwise, Asian indices traded weaker on Thursday, in wake of Fed’s rate hike overnight and as such, the Nikkei 225 edged down by 0.06 percent and Australia’s S&P/ASX 200 was 1.13 percent down.

Technical Analysis

EUR/USD

EUR/USD

After release of major events reports on Wednesday, this currency pair reached a peak of $1.12792 by 14:00 UTC, and was dragged by a downtrend the next hour to close at $1.12149 by 18:00 UTC. It recorded much fluctuation in today’s trading session and may tumble as from 13:00 UTC, depending on the U.S. Philadelphia Fed Manufacturing Index for June which is due to be released at 12:30 GMT.

UKOIL

UKOIL

The international benchmark, Brent crude recorded a huge fall yesterday at 14:00 UTC as from the $48.34 level to close this bearish trend at the $47.11 level, the same hour. As from 18:00 UTC, it started consolidating till the end of yesterday’s session after release of the U.S. Inventories data which rose by 1.66m barrels, much below analysts expectations. On Thursday, it started picking momentum from 00:00 UTC and may gradually rise further.

AUD/USD

AUD/USD

In yesterday’s early trading hours, the AUD/USD pair performed better than the previous day as it gained several momentary jumps through 09:00 UTC. Its highest level for Wednesday was at $0.7628 around 12:00 UTC, and immediately afterwards, was dragged lower. Today, the asset gained 0.38 percent at the 0.76205 level around 01:00 UTC due to positive employment change data. This can be traded with the Options Builder tool today.

Things to watch on the market

Tip 1

The GBP/USD, EUR/USD and Wall Street indices should not be overlooked today, as the U.S. dollar could change its trend on the market given the rise in interest rates by the Fed.

 

Tip 2

Consider trading the EUR/GBP, GBP/JPY, FTSE 100 and the DAX vs FTSE pair once it is available on the trading platform.

 

Tip 3

The USD/CHF, GBP/CHF and the SMI Future could be affected after Switzerland’s interest rate result, keep a close watch on these.