Table of Contents:
- Quick Facts
- The Fed’s U-Turn
- The Market Reaction
- Other Key Developments
- Bank of England and US Final GDP in Focus
Quick Facts
- Federal Reserve reduces 2025 rate cut forecast
- US dollar surges to new highs
- Stock prices plummet
- Brazilian real falls to new record low
- Cocoa futures push to fresh highs
The Fed’s U-Turn
In a surprise move, the US Federal Reserve (Fed) unexpectedly reduced its 2025 rate cut forecast, sending shockwaves through global financial markets.
The sudden shift in the Fed’s stance sent stock prices plummeting, while the US dollar soared to new heights.
The Market Reaction
The markets were quick to respond to the Fed’s surprise move, with stock prices tumbling across the board.
The S&P 500 index plunged by over 1% in response to the news, with tech stocks being the hardest hit.
The tech-heavy Nasdaq Composite fell by over 1.2%, with many of the major indices experiencing their worst day in weeks.
On the other hand, the US dollar surged to new highs, benefiting from the increased demand for safe-haven assets.
Other Key Developments
Away from the Fed’s surprise move, a number of other key developments were taking place in the world of Forex.
- The Bank of Japan (BoJ) has passed on the opportunity to raise interest rates, opting instead to maintain its monetary stimulus.
- The Brazilian real has fallen to a new record low, following a string of weak economic data and political uncertainty.
- Cocoa futures have pushed to fresh highs, driven by growing demand for the commodity and tight supply.
Bank of England and US Final GDP in Focus
In the coming days, investors will be keeping a close eye on two key sets of data: the Bank of England’s (BoE) upcoming monetary policy meeting and the release of the US final GDP figures for the third quarter.
The BoE is expected to keep interest rates unchanged, following a series of three rate hikes in the past year.
The US final GDP figures will provide the first comprehensive look at the country’s economic performance in the third quarter.
