Hawkish FOMC Vs. Dovish Fed Fund Rate – May 3rd Daily Highlights

Posted Wednesday, May 3, 2017 by
Arslan Butt • 2 min read

The market has finally fluctuated due to the release of the economic events which we mentioned in our Forex Signals Brief For May 3rd. Earlier in the Asian & European sessions, traders seemed shy about entering the market. However, with the economic releases, they jumped into the market, particularly to trade the commodity market.

The exciting thing is that our forex trading signal on Gold closed at take profit level of $1249. Unfortunately, the trading signal on Crude Oil missed our take profit by just one pip. That's why we decided to close it before the release of the inventory figures.  


Major Highlights Of The Day

Crude Oil Inventories – In the New York Session, the Energy Information Administration (EIA) released inventory figures showing a draw of 0.93 million barrels. The draw was less than the expected 2.2 million. The news release was slightly bullish but oil prices remained stable.

ADP Employment Change (U.S) – The ADP data failed to surprise the market. Private payrolls came out to 177K for the month of April, which was marginally higher than the expected 175K. Consequently, the market moved their investments towards the dollar, rather than the Gold.

Prelim Flash GDP q/q (EUR) – The single currency remained supported even against the stronger dollar due to increased GDP. The figure rose to 0.5% in the Q1 of 2017. The impact of the news remained muted as the data was in line with expectations.

FOMC Statement & Fed Fund Rate (U.S) – A few minutes ago, the U.S Federal Reserve released the rate decision and decided to leave it unchanged at 1%.

The policy statement remained hawkish as policy makers played down slower economic growth by emphasizing the improved labor market. As a consequence, investors are likely to increase demand for the greenback and we can expect bearish momentum in the Gold.


Ending Remarks

Though the policy statement seems hawkish but we can't ignore the fact that the Fed left the interest rate unchanged and balanced the hawkish statement with the dovish rate. At the moment, the market is likely to stay uncertain and investors will wait for the Non-farm payroll figures which are due on Friday.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
0 0 vote
Article Rating
Notify of
Inline Feedbacks
View all comments