Today the US Fed regular meeting is to be held

The US dollar index continues to fall ahead of today’s Fed meeting. In less than 3 weeks, it has already fallen by almost 4%. There are several reasons for this: mass protests of African-Americans in the United States, Fed emissions and soft monetary policy, as well as the ongoing Covid-19 pandemic. Market participants do not expect a Fed rate cut. Any optimistic statements by its representatives may support the dollar. Also today at 13-30 CET the USA inflation data for May is expected to be released, the outlook is positive. In the morning, China reported a decrease in May inflation, which was more significant than expected. This helped to strengthen the renminbi, as well as the Australian and New Zealand dollars. Michel Barnier, the EU’s negotiator for Brexit, is expected to make a statement today. It may affect the British pound if any new information appears. Let us recall that Britain withdrew from the European Union in February and the pound’s exchange rate collapsed. Now it has got most of its losses back. Now he’s got most of his losses back. Until December of this year, the transitional period for Brexit will continue, during which the parties must settle their mutual obligations.

There was no single trend in the US stock market on Tuesday. The high-tech Nasdaq index rose, while the remaining indices fell. Apple Inc shares rose in price by 3.2% and Microsoft Corporation – by 0.8%. Yesterday they updated their historical highs. Nasdaq 100 first tested the psychological level of 10,000 points, but could not gain a foothold there. Two influential international organizations, the World Bank and the OECD (Organization for Economic Cooperation and Development), published very pessimistic forecasts of world GDP for the current year. The World Bank expects a global economic downturn of 5.2%, while the OECD expects global GDP to fall by 6% or 7.6%, depending on whether the 2nd wave of the coronavirus pandemic occurs or not. This may limit stock market growth. In the meantime, the global MSCI world stock index soared by 45% from its 4-year low in March this year.

Oil quotes are declining slightly for the 3rd day in a row. At first, investors took profits after the previous growth because OPEC + extended the existing restrictions only until the end of July, and not until the end of September, as was expected. Forecasts of the global economic recession in 2020 from the World Bank and the OECD became an additional factor in the cheapening of oil. In mid-April, the IMF published its forecast for the global GDP decline by 3% this year; it can be revised upwards. Independent American Petroleum Institute (API) expects an increase in oil reserves in the US over the past week by 8.4 million barrels. This may be an additional negative for oil quotes. The Energy Information Administration (EIA) will release official data, as usual, today at 15-30 CET.

Gold is rising in price for the 3rd day in a row. This is facilitated by the weakening US dollar and negative forecasts of a global recession from reputable international organizations. The Fed meeting results may adversely affect the dynamics of precious metals, if the US regulator does not announce new, additional measures to stimulate the economy.