Gold, Dollar and Nasdaq FOMC decision, response to latest projections


Gold, US dollar, Nasdaq – according to market reports meeting before 2020

  • The FOMC’s decision halts the target federal funds rate to zero, as expected.
  • Fed officials upgraded economic projections for GDP, unemployment and inflation
  • Nasdaq rises higher in response to US dollar and gold price action

federal Reserve Just released its latest monetary policy statement where the central bank reiterated its dovish position. The September 2020 FOMC statement stated that the benchmark Federal Funds rate was left unchanged at 0.00–0.25%. The Fed announcement also revealed an intention to continue purchasing Treasury securities and agency mortgage-backed securities at at least the current pace. Interestingly, the two Fed officials differ from the latest FOMC decision as they opt for more flexibility on the policy going forward.

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FOMC Summary of Economic Proposals – September 2020

Chart Source: federal Reserve

The September Fed announcement also included updated quarterly economic projections. The Federal Reserve upgraded almost all major economic variables – such as real GDP, unemployment and inflation – compared to June’s forecasts.

US DOLLAR INDEX PRICE CHART: 5-minute time frame (16 SEP 2020 INTRADAY)

US Dollar Index Price Chart DXY

Chart created by @RichDvorakFX Together TradingView

The US Dollar reacted negatively soon after the September FOMC statement crossed market strings. The USD price action is about to trade flat intraday higher since WhatsApp, however, and may be due to a relatively better US economic outlook.

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Gold Price Chart: 5-minute time (16 SEP 2020 INTRADAY)

Gold Price Chart xau usd

Chart created by @RichDvorakFX Together TradingView

The price action of gold is showing the direction of the US dollar. The scope of the precious metal has expanded since the FOMC statement was released, but has since returned to the session’s lows. Although the Federal Reserve may give relatively more support to gold, it is likely to let inflation rise marginally to its 2% average objective.



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NASDAQ PRICE CHART: 5-minute time frame (15 SEP to 16 SEP 2020)

nasdaq price chart Stocks react to September 2020 fomc decision

Chart created by @RichDvorakFX Together TradingView

For major stock indices, the Nasdaq is putting more emphasis as investors are mitigating risk, with the Fed reiterating its ‘short-term’ stance and its intention to maintain the printing press. After digesting the immediate response to the September 2020 FOMC statement and updated economic projections, traders now focused on a faked-up press conference scheduled for 18:30 GMT led by Fed Chair Jerome Powell.

read on – US Dollar Price Forecast: USD Descending Triangle for FOMC

— written by Rich dwarka, Analyst for DailyFX.com

Connected with @RichDvorakFX Twitter for real-time market insights

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