Markets have been shaken by the main focus event for this week which is the FOMC meeting which is the last policy meeting to close out the year 2023.
As expected drastic price movements will occur, the US dollar currency has plunged significantly in reaction to the results of the FOMC meeting that took place early this morning.
The Federal Reserve (Fed) kept interest rates unchanged at 5.50% as forecast by the majority of the market with the latest economic projections signaling the move to raise interest rates is at the end of its phase.
Fed Chairman Jerome Powell explained the decision to keep interest rates on hold and the direction of further monetary policy.
According to Powell, policymakers are still evaluating whether interest rates are high enough, but do not intend to raise rates further.
In fact, legislators are also discussing and considering whether it is necessary to cut interest rates.
Inflation is seen to be still high, but the growth of economic activity is slowing down and high interest rates are also burdening fixed business investment.
It has yet to be determined what steps the central bank will take after this, but Powell said they will remain focused on not making the mistake of keeping interest rates high for too long.
Analysts assessed Powell's dovish speech as an indication of the Fed's tendency to gradually ease policy.
Analysts also expect 3 interest rate cuts to occur in 2024.
After this, several more central bank meeting results will be observed involving the Swiss National Bank (SNB), the Bank of England (BOE) and the European Central Bank (ECB).
All central banks are expected to follow the Fed's lead in keeping interest rates on hold and follow-up remarks by the governor will help provide an indication of further policy direction.
The significant depreciation of the US dollar is expected to continue today while giving room to other major currencies to increase in value.
For the development of the commodity market, oil prices have been reported to recover slightly for both WTI and Brent oil, but remain at risk of further falling.
Meanwhile, joy for gold investors when the price of the yellow metal has soared past the $2,000 level during the FOMC meeting this morning. Prices traded around the $2,038 level as of the Asian session.
