The strength of the USD continues to put more downward pressure on the financial market across the board. Commodity prices dropped to a 6-year low yesterday as gold price was seen at $1065 an ounce while copper prices drop to $4667 which is the lowest prices since the financial crisis. Currencies were not left out in this massive sell-offs, Eurusd dropped to a fresh monthly low at 1.0630 while Cable dropped back to 1.5153. The inflation figures for UK remains unchanged at -0.1% just as that of US economy also unchanged at 0.2%.
The fate of USD will be decided later today as the market awaits the statement of the FOMC. This statement is expected to throw more light into when the FED is likely to raise interest rate and also some insights on the macro-economic state of the US economy. The market is already priced in for a December lift off. Tonight’s statement will confirm, if December is still a reality or we might see a further delay. Also, Building permit data is expected from the US later today; this has some impact on the strength of USD as well.
Commodity traders should also keep an eye on crude inventory later today; market is expecting a draw down on crude stock of about 1.9 million barrels from the previous stock pile of over 4 million barrels. Oil prices have been sliding in the past couple of days on the assumption of supply glut. Today’s data will confirm if the market is still over supplied or not.