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Gold, GBPUSD Rally Following Latest FOMC Meeting
Markets rallied following the latest Federal Reserve policy meeting, with GBPUSD and Gold surging higher.
The Federal Open Market Committee (FOMC) increased interest rates by 75 basis points, despite some calls to pivot policy.
Following the announcement, the bank stated, “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time”.
Inflation in the United States continues to track at historical highs, leading the Fed to maintain its current agenda in this meeting.
XAUUSD rose to an intraday high of $1,669.28 on the news. Whilst GBPUSD hit a peak of 1.1562.
U.S. Private Sector Payrolls Increase Last Month
Private payrolls in the United States unexpectedly rose in October, as the labor market continues to be resilient despite the economic downturn.
Figures from the monthly ADP private sector report revealed that payrolls had risen by 239,000 last month.
Markets had expected private hiring to increase by 195,000, which comes as job openings in the U.S. also recently rose.
Today’s data comes ahead of Friday’s non-farm payrolls, which is expected to come in at 200,000.
The S&P 500 ended the day down 2.5% on the news.
FTSE 100 Lower, as BOE Set to Hike Rates
London’s FTSE 100 closed today’s session lower, as markets prepared for the latest BOE policy meeting.
The Bank of England is expected to follow the Fed, and increase rates by 75 basis points in tomorrow’s meeting
This comes as inflation in the United Kingdom is currently at 10.1%, which is its highest level in over 40 years.
Should the BOE make the move, it will be the biggest hike the bank has made since 1989.
The FTSE 100 closed today’s session 0.58% lower.
“The market can stay irrational longer than you can stay solvent.”
John Maynard Keynes
Eliman Dambell
Senior Market Analyst
