SHANGHAI, Sep 18 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.
Having ridden a short-covering rally sharply higher after the Federal Reserve left interest rates on hold, the US dollar erased virtually all of those gains on Thursday as markets digested the US central bank’s policy statement.
Against a basket of its rivals, the dollar index rose about 0.32% to trade at 93.493 before erasing most of its gains to trade nearly flat on the day at 93.22. It fell to more than two-year lows below 92 earlier this month.
Gold prices fell on Thursday to the lowest in more than a week, after the US Federal Reserve dashed investors’ hopes for more stimulus to support the coronvirus-hit economy.
The Fed pledged to keep rates pinned near zero levels until inflation was on track to “moderately exceed” its 2% inflation target “for some time”. And it also stated that it expected a faster economic recovery than previously forecast, with unemployment falling more quickly than it had expected in June.
Oil prices rose about 2% on Thursday, turning positive as OPEC and its allies said the producer group would crack down on countries that failed to comply with output cuts and planned to hold an extraordinary meeting in October if oil markets weaken further.
On Wall Street, during Thursday’s regular trading session, the S&P 500 declined 0.8% for its biggest drop in a week. The Dow dipped 130 points, snapping a four-day winning streak. The tech-heavy Nasdaq Composite fell 1.3% and briefly dipped back into correction territory, down 10% from its record high.
The US Labor Department’s report showed the number of Americans filing new claims for unemployment benefits fell last week, but remained at extremely high levels as the labor market recovery shifts into low gear and consumer spending cools.
Filings totaled 860,000 for the week ended Sept. 12, the Labor Department reported Thursday.
Investors remained on edge about the outlook on further coronavirus stimulus as well as the timing of a viable vaccine.
Republicans and Democrats are still struggling to agree on how much aid to continue to provide in a follow-up bill to the previous $2 trillion package. President Donald Trump said Wednesday he liked “the larger numbers,” urging GOP lawmakers to go for a bigger coronavirus stimulus, but his comments left Republicans skeptical.
Meanwhile, the path to a Covid-19 vaccine, which is critical to the economic recovery, still seems unclear. Health officials said vaccinations would be in limited quantities this year and not widely distributed for six to nine months.
The Bank of England on Thursday left interest rates unchanged and maintained its current level of asset purchases, but warned that the outlook for the economy remains “unusually uncertain.”
The Bank also revealed that the Monetary Policy Committee had been briefed on plans to explore how a negative bank rate could be implemented effectively, meaning the BOE is now openly considering how to use negative interest rates.
Euro zone’s adjusted current account for July, US second-quarter current account and University of Michigan's Consumer sentiment index for September are set for release today.