Hello traders, and welcome to Thursday’s session. We are trading in the aftermath of the closely watched FOMC decision on Wednesday. As expected, the Federal Reserve left interest rates unchanged. However, what caught market attention was the Fed’s outlook: inflation is still expected to remain elevated, and economic growth forecasts have been trimmed. The dot plot – always a point of scrutiny – now points to two rate cuts before the end of the year.
Market reaction was mixed and, frankly, not overly technical. Indices fluctuated within a sideways range, though with a slight bearish tilt. The U.S. dollar gained considerable strength, while gold took a hit and drifted lower. Volatility was evident, but direction remained somewhat muddled.
Thursday brings a packed economic calendar. Overnight, we received better-than-expected GDP data from New Zealand, but that was counterbalanced by disappointing jobs data from Australia. Despite this divergence, the Australian and New Zealand dollars are both under pressure, falling in tandem. Traders are treating them similarly in risk sentiment terms, and neither currency is finding footing early in the session.
In Europe, the spotlight shifts to central bank decisions. First up is the Swiss National Bank, which is widely expected to deliver a 25 basis point cut. Later, attention will turn to the Bank of England, which is forecast to keep rates steady at 4.25%. These events could inject volatility into CHF and GBP pairs, especially with summer liquidity starting to thin.
Worth noting: U.S. markets will be closed today, so the second half of the day may experience a slowdown in momentum. With American traders sidelined, European developments will carry more weight until the weekend.
On the charts, U.S. dollar strength continues to dominate currency flows. The Japanese yen is also firming, hinting at some mild risk-off sentiment. Meanwhile, the commodity complex is split. Oil prices are slightly higher but subdued, showing resilience without explosive movement. Metals, on the other hand, are on the back foot. Gold, silver, and copper are all trading lower today, extending the pressure from yesterday's post-FOMC reaction.
This is a session driven by central bank narratives and lingering geopolitical uncertainties. With the weekend approaching and a shortened U.S. trading week, traders should remain nimble and alert to surprises from monetary policy announcements.