Asia stocks rose to a four-month high on Thursday after the Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle amid signs of slowing global growth. The dollar struggled near a three-week trough against its major peers and U.S. Treasury yields were significantly lower as investors reacted to the Fed’s change in tone. The Fed on Wednesday held interest rates steady as expected, and also discarded its promises of “further gradual increases” in interest rates. The central bank said it would be “patient” before making any further moves amid a suddenly cloudy outlook for the U.S. economy due to global growth risks and impasses over trade and government budget negotiations. The U.S. central bank also said on Wednesday that its balance sheet would remain larger than previously expected. However, while market expectations for Fed tightening may have waned significantly, some analysts suggested rate hikes still remained a near-term possibility.
In main currencies, regarding EUR/USD, dovish Fed highlighting prudent patience in the interest rates accommodation and the pair surging above 1.1500 ahead of the Eurozone fourth-quarter GDP spur rally to extend towards 1.1570 and 1.1600. Regarding GBP/USD, spent the day under pressure, with bulls disappointed after the UK Parliament voted to re-negotiate the Irish backstop within the Brexit deal.
In commodities, for the 24 hours to 23:00 GMT, Gold rose 0.67% against the USD and closed at $1325.00 per ounce, amid broad weakness in the US dollar while in the Asian session the pair traded at $1323.90, with gold trading 0.08% lower against the USD from yesterday’s close. Oil prices rose after U.S. government data showed signs of tightening supply and as investors remained concerned about supply disruptions following U.S. sanctions on Venezuela’s oil industry. U.S. crude oil futures were up 0.7 percent at $54.59 per barrel.
For today as per the economic calendar, the high impact news refer mainly to the Canadian GDP m/m.