Markets retreat as Fed sees lower rates for next few years

The Dollar strengthening continues currently ahead of the US Labor Department report at 16:30 CET expected to show 825 thousand Americans likely sought unemployment benefits over the last week, down from 884 thousand the previous week. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, added less than 0.1% Wednesday as National Association of Home Builders reported builder confidence improved for September as the Housing Market Index rose to record high 83 from 78, and US retail sales rose below forecast 0.6% over month in August, following 0.9% gain in July. EUR/USD continued its sliding yesterday as GBP/USD continued climbing despite data showing annual inflation slowed sharply in August – to 0.2% after a 1% rise in July. Both pairs are lower currently. AUD/USD continued climbing while USD/JPY kept sliding yesterday with the dynamics reversed for AUD/USD currently.

Futures on three main US stock indexes are falling currently after a mixed session on Wednesday as the Federal Reserve conference revealed US policymakers see interest rates on hold through to at least 2023, with inflation not breaching 2% over that period. The three main US stock indexes recorded returns ranging from -1.3% to +0.1%. European stock indexes are mixed currently after a mixed session Wednesday ahead of Bank of England decision today at 15:00 CET as traders widely expect the UK central bank will hold rates unchanged but is likely to signal that it is getting ready to pump more stimulus into Britain’s economy. Asian indexes are down today led by Australia’s S&P/ASX 200 All Ordinaries index despite a report Australia’s unemployment rate fell unexpectedly to 6.8% in August from 7.5% in July.

Brent is edging lower today as US Gulf of Mexico offshore energy producers begin restarting operations shut off because of Hurricane Sally. US Energy Information Administration reported US crude inventory fell by 4.4 million barrels last week. Prices rebounded Wednesday. The US oil benchmark West Texas Intermediate (WTI) futures surged: October WTI jumped 4.9% but is lower currently. November Brent crude closed 4.2% higher at $42.22 a barrel on Wednesday.

Gold prices are pulling back today. December gold added 0.2% to $1970.50 an ounce on Wednesday.