1. USD Nears 2-Week Highs Ahead of Crucial Fed Decision
European markets opened mostly lower as the focus shifted to today’s Fed meeting. Investors look forward to hear from Fed Chairman Jerome Powell and particularly the Fed’s plans on future monetary policy. Yesterday, Mario Draghi unexpectedly made very dovish statements in response to the record low inflation that hurt the EUR massively, and especially its long-term outlook, which could cause the Fed to turn to dovish measures such as APP or even impose rate cuts into negative territory. The EUR/USD is currently trading at a one -month low as the common currency continues to wallow on Draghi’s statements.*
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Donald Trump kept markets on their toes after announcing that he will meet China’s president Xi on the G20 which brought the risk-on mood back to the markets, especially to stock markets. Trump’s latest tweets sparked hopes of a resolution to the ongoing trade war between the two nations.**
3. Forex Preview: EUR at Monthly Lows
The EUR was hammered down by Mario Draghi’s statements that seem to have been made by him alone without consulting the governing council in advance. Meanwhile, the USD held on most of its gains ahead of today’s closely watched Fed decision. Elsewhere, the Aussie came back up strong with its high-beta status, further supported by commodities across the board also trading higher on the risk appetite increase.***
4. Oil Prices Edge Higher
Oil prices extended gains this morning after rising in the previous session on rekindled hopes for a U.S.-China trade deal after Trump’s tweets and on the potential for conflict between the U.S. and Iran in the Middle East after tanker attacks there last week.****
5. Gold Loses Steam, BTC Adds
Spot gold held onto most of its gains despite the risk-on tone which is noteworthy and reveals that some safe haven hedging seems still to be desired by market participants. Spot gold prices did however lose some steam with XAU/USD last seen trading 0.2% lower as of 8:50 GMT. Elsewhere, Bitcoin reigned well above the 9K mark and was last seen trading 0.35% higher at $9,185.3.*****
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*CNBC Jun 19, 2019 2:48 AM ET
**Reuters Jun 19, 2019 3:53 AM ET
***FXStreet Jun 19, 2019 03:07 AM ET
****Bloomberg Jun 19, 2019 06:13 AM ET