Sep 17, 2020, 9:18:16 AM

Morning Market Review

EUR/USD

EUR declines against USD during today's Asian session, updating local lows of August 12. The instrument loses about 0.50%, testing the level of 1.1750 for a breakdown. USD is supported by the results of the Fed meeting, summed up on Wednesday. As expected, the regulator did not change the parameters of monetary policy, stressing that rates are likely to remain minimal until the inflation target is reached (and exceeded for a certain period of time). At the same time, the head of the regulator Jerome Powell promised to use the full range of available instruments to support the US economy in the face of continuing risks. However, the Fed does not expect inflation of 2% until the end of 2023. The decline in GDP by the end of 2020 will be approximately 3.7%, which is much better than the June forecasts of 6.5%.

GBP/USD

GBP declines against USD during today's morning trading session, interrupting an upward rally since the beginning of the week that allowed the instrument to renew local highs since September 10. The decline in GBP is facilitated by the correctional growth of USD after the publication of the minutes of the Fed meeting on Wednesday evening. Yesterday's macroeconomic statistics from Great Britain also were pessimistic for the "bulls". Consumer Price Index slowed down in August from +1% YoY to +0.2% YoY, which, however, turned out to be slightly better than market expectations at 0% YoY. On a monthly basis, prices declined by 0.4% MoM after rising by 0.4% in July. Analysts had expected the decrease rate at 0.6% MoM. Today, investors are focused on the Bank of England meeting on the interest rate. It is expected that the committee of the regulator will unequivocally speak out in favor of keeping the interest rate at the current level of 0.1%, and the program of asset purchases might be kept at GBP 745B.

AUD/USD

AUD shows moderate decline against USD during today's Asian session, while maintaining a flat direction of trading in the short term. The instrument is retreating against the background of the growth of USD almost across the entire spectrum of the market after the publication of the Fed meeting minutes the day before. At the same time, AUD reacts weakly to the optimistic statistics on the Australian labor market, which were released today. Employment Change in Australia in August increased by 111K after increasing by 114.7K in the previous month. Analysts had expected a decrease of 50K. At the same time, Fulltime Employment added 36.2K, and Part-Time Employment added 74.8K. Unemployment Rate for the same period fell from 7.5% to 6.8%, which turned out to be much better than the forecast for growth to 7.7%. Participation Rate in August increased slightly, from 64.7% to 64.8%.

USD/JPY

USD is strengthening against JPY during today's Asian session, correcting after an active "bearish" rally since the beginning of the week, which brought the instrument to local lows since July 31. The instrument is supported by the minutes of the Fed meeting published yesterday, which turned out to be generally neutral, but brought weak optimism to the market, tired of endless analysis of economic risks. JPY, in turn, reacts positively to news of Yoshihide Suga's appointment as Prime Minister of Japan. However, skeptics have already commented on this appointment, noting that Suga worked under Shinzo Abe for a long time, and therefore will probably continue the previous course of economic policy. Yoshihide Suga himself promised to carry out a series of economic reforms.

XAU/USD

Gold prices are declining during today's Asian session, retreating under the onslaught of American "bulls", which received a new impetus for growth after the publication of the final minutes of the two-day US Federal Reserve meeting on Wednesday. Jerome Powell, as expected, kept the parameters of monetary policy unchanged, but again promised the market to use all available tools to support the American economy in this difficult time. At the same time, gold is still supported by not the most optimistic macroeconomic statistics from the United States. Investors turned their attention to Retail Sales data yesterday. In August, sales slowed down from +0.9% MoM to +0.6% MoM, contrary to forecasts of growth to 1% MoM. Analysts attribute this decline to the termination of measures of economic support for the population in August.