USD weakening ahead of Thursday morning's FOMC statement - APAC Update

. 2 min read

The AUD USD opens at 0.7129 and the NZD USD opens at 0.6832 this morning.

The USD is weakening as we head towards Thursday morning's FOMC statement when the Federal Reserve are widely expected to keep rates on hold.

Global growth concerns, the lack of progress in the ongoing US-China trade war, and the paused federal government shutdown are likely to see the Fed chairman Jerome Powell deliver a dovish statement. As announced last year, all policy statements will be followed by a post-meeting news conference but there will be no updated rate or economic projections from policymakers.

Global equity markets are back in the red with European and UK markets selling off on Brexit uncertainty and plummeting oil prices. Some disappointing earnings reports led by Caterpillar, and Trump’s comments that there could be another government shutdown if lawmakers fail to sanction funds for the wall by mid-February have seen US stocks fall sharply.

Overnight tonight, UK MPs are due to vote on a number of amendments to Theresa May’s Brexit plan including an alternative plan to the Irish backstop for avoiding a hard border in Ireland.

Today’s  NAB Business Confidence report is likely to have little impact on the AUD with investors awaiting tomorrow morning’s CPI data release before adding to their positions.

Global equity markets have turned negative, Dow -1.45%, S&P 500 -1.23%, FTSE -0.91%, DAX -0.63%, CAC -0.76%, Nikkei -0.60%, Shanghai +0.18%.

Gold prices surged to a seven-month high on Friday and are still holding above $1,300 an ounce. WTI Crude Oil prices have fallen sharply overnight, currently down 4.0% trading at $51.88 a barrel.

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