SHANGHAI, Sept. 21 (SMM) – The Fed left its interest rates unchanged at its September policy meeting, meaning it is concerned about economies in emerging markets. European and US stocks fell sharply, while the US dollar returned to 95 due to risk aversion. Crude oil prices dropped nearly 5% as OPEC said they will not cut output and due to worries toward downshift worldwide. Commodity prices also dropped across the board.
The US dollar climbed above 95 as the likelihood of an interest rate hike by the Fed remains later this year. Besides, the US dollar is still supported by risk aversion capital. European Central Bank Executive Board’s Benoit Coeure implied they will likely push additional stimulus measures, weighing on the euro. The EUR:USD fell to 1.1350. The radical left wing won Greek general election, meaning the country will start a new journey on its economic reform.
OPEC predicts any gains in crude oil prices will unlikely outstrip USD 5/bbl per year, with prices expected to reach USD 80/bbl as of 2020. Output declines in non-OPEC countries are not big enough to offset current oversupply. When combined with talks between the US and Russian on Syria issue, crude oil prices plummeted nearly 5%, dragging down base metals prices.
Global stocks markets mostly fell. Gold prices, however, raced up to a three-week high due to risk aversion. LME base metals prices tumbled across the board to look for price floor.