Fed officials kept their benchmark overnight lending rate at between zero and 0.25%, where it has been since December.
- The hard task of determining when the recovery is strong enough to withdraw the $1 trillion the Fed injected to avert a depression falls on Fed Chairman Bernanke. Last week's US GDP expansion resulted in a weaker greenback as the Fed signaled growth alone won't be enough to warrant tighter policy. The Federal Reserve repeated it will keep interest rates close to zero for an extended period and specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline.
- The Labor Department tomorrow will probably report that the unemployment rate rose to 9.9% in October, from 9.8% in the previous month, as companies cut another 175,000 jobs, according to median forecasts of economists. More Americans filed bankruptcy in October than any month since changes to bankruptcy laws in 2005.
- Oil price rose to as high as $81.06 a barrel after a report showed that crude inventory surprisingly drew more than 4 million last week versus an expected rise of 1.7 million barrels. Further decline in USD as the Fed kept its dovish stance also provided a favorable environment for oil prices' rally. However, investors remained uncomfortable as price surged above 80 and profit-taking was seen from then on. Gold advanced further up amid weakness in USD and speculations on more central bank purchases. The benchmark contract jumped to as high as 1098.50 before settling at 1087.3.
Currency to watch out for: EURUSD & GBPUSD
- The EURUSD pivot point is at 1.4800 with a preference to enter into long positions at 1.4810
- The GBPUSD pivot point is at 1.6480 with a preference to enter into long positions at 1.6490
Today's calendar and market movers:
- UK Official Bank Rate expected to remain unchanged at 0.5%
- EU ECB Minimum Bid Rate expected to remain unchanged at 1.0%
- US Unemployment Claims expected to drop to 523,000
Now onto Stocks:
- US equities finished slightly higher on Wednesday after ADP employment data showed the pace of job losses continued to slow and the Fed signaled an improvement in economic conditions. Right after the Fed's rate decision, price action in equities was volatile. The major US averages initially moved to the downside, before spiking up to new highs soon afterwards. However, equities then proceeded to sell off in the final half hour of trade as traders took profits. At the closing bell the Dow Jones closed up 0.31%, the S&P closed up 0.1% and the NASDAQ closed up 0.09%.
- As of 07:00 GMT the Nikkei is trading at -1.29% and the Hang Seng at -0.82%.