Financial markets Review after the Fed meeting
The Fed surprisingly left the policy rate and the QE
measures unchanged in September. And Policymakers acknowledged that the
economic recovery in the US
was taking place but the improvement in the labor market remained uncertain.
Fed plans to continue to buy $85 billion a month in treasuries and mortgage-backed bonds.
so he decided to postpone withdrawing stimulus until getting more evidence that economic growth is on the right track.
Impact on Stock markets:
U.S. stocks rallied to record highs on Wednesday after the Federal Reserve surprised investors and decided against trimming its bond-buying stimulus program, which has fueled Wall Street’s rally of more than 20 percent this year.
Most market participants were expecting the central bank to begin a withdrawal of the bond-buying program by about $15 or $10 billion a month.
Impact on Foreign Exchange Markets:
The US dollar dropped sharply against other major
currencies including the Euro, Sterling
and Yen as well as precious metals.
The EUR/USD rose by 1.31 % after hitting a high of $
1.3570. Due to the absence of major economic news for today, and the pair is
expected to continue its bullish trend towards $1.36.
The pound rose during today trading session against all of its major counterparts. Regardless of the Fed announcement, the pound has benefited from the release of a report from the Bank of England.
Gold, a traditional hedge of inflation, is trading at $ 1371 per ounce , up nearly $ 70 compared to Wednesday morning , while Brent rises above $ 111 a barrel.
Although the decision of the U.S. Federal Reserve pushed the decline of U.S. dollar against major currencies, a reversal of trends may be possible ahead of the speech of both the ECB president Mario Draghi , and Haruhiko Kuroda President of the Japanese Bank on the next week .
