Overview- Dollar finds support after the dovish Fed drove the currency lower
- Chinese stocks sell-off after the PBoC hike rates
- Brent oil dropped 1.4% on Wednesday
The Federal Reserve left interest rate expectations for 2018 and 2019 unchanged. Lagging inflation remains to be the centre of conversation for policymakers. Despite the lack of price stimulation, members decided to raise the cost of borrowing by 25 basis points as expected.
The dollar is 0.03% higher after the Fed raised interest rates for the third time this year. The greenback dropped by 0.7% overnight as investors digested the Fed’s dovish tone.
European stocks are slipping, taking ques from the lacklustre Asian trading session.
Germany’s DAX 30 is 0.22% lower, while France’s CAC 40 is down 0.11%. London’s FTSE 100 has fallen by 0.06% and Spain’s IBEX 35 is 0.33% weaker.
Later today it’s the European Central Bank’s and the Bank of England’s turn to announce their interest rate decision. The central banks are expected to keep interest rates on hold.
Leading up to the interest rate decisions; the euro is 0.05% stronger against the dollar. Sterling is 0.14% higher against the greenback and has gained 0.2% against the euro.
The People’s Bank of China increased rates by 5 basis points for its medium-term lending facility and reserve repos. China’s stocks declined as a result of the rate hike. Hong Kong’s Hang Seng fell 0.68%, while the China A50 slipped by 0.77%.
Commodities
Oil prices are subdued after Brent oil gave up 1.4% on Wednesday and Crude oil lost 1% in the previous session.
Brent oil is 0.27% lower today, trading at $62.50 per barrel. Crude oil is 0.22% weaker, trading at $56.85.
Gold got a boost from the sell-off in equity markets, gaining 0.09%, trading at $1256.35.
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