The US dollar decreased against other major currencies as investors were digesting the latest Federal Reserve statement.
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The dot plots indicated a downwards revision in future rate hike expectations, while most members saw at least one rate hike by the end of the year.
The sturdy statistics fuelled sparkling speculation over a capacity US rate hike this month. “If not, we could see a $10 rebound after the Fed meeting”. This week, investors are focusing on the decision and outlook from the Fed as well as a meeting at the Bank of Japan, with traders split over what Governor Haruhiko Kuroda will do as he weighs whether to press on with negative rates.
The US Federal Reserve is expected to keep interest rates unchanged later on Wednesday amid tepid inflation and recent weak economic data, but could signal an increased likelihood of a rate rise by the end of the year.
The Australian and New Zealand dollars were stronger, with up 0.73% at 0.7544 and with advancing 0.56% to 0.7307. Platinum was up 0.5 percent at $1,026.25 and Palladium rose 0.6 percent to $687, extending a 2 percent increase on Monday. Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, slid 0.41% to 938.75 tonnes on Tuesday. However, On Monday, the United States dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.22% at 95.84, off Friday’s two-week high. Spot gold looks neutral in a range of $1,313 to $1,319 an ounce and an escape could point a direction, said Reuters technical analyst Wang Tao.
LONDON – Gold edged higher on Wednesday after the Bank of Japan (BoJ) adopted a target for long-term interest rates, and further gains were expected if the United States central bank holds back from a rate increase.
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The greenback had strengthened after data on Friday showed that rose 0.2% in August, compared to expectations for a 0.1% gain.
