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Fed’s denial of next rate hike by 75 basis points leads to disappointment in market sentiment? Will gold continue to soar today?

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The U.S. Federal Open Market Committee announced on Wednesday that it would raise the target range for the federal funds rate to a range of 0.75%-1.00%, in line with market expectations. This is the first time the Fed has raised interest rates by 50 basis points in nearly 20 years.

In his subsequent speech, Powell acknowledged that U.S. inflation is too high and must be lowered to keep the labor market strong, but ruled out the possibility of a single 75 basis point rate hike. Powell claimed that the underlying momentum of the U.S. economy remains strong. A 50-basis-point rate hike in the next few meetings is also an option, but ruled out a 75-basis-point hike, saying a 75-basis-point hike was not worth considering.

The dollar tumbled against a basket of major currencies on Powell’s remarks. Yields on the 10-year U.S. Treasury note also fell. The market had priced in a 50% chance of raising interest rates by 75 basis points before July, so everyone was concerned about whether raising interest rates by 75 basis points was an option on the table, but Powell basically opposed this. This led to the disappointment of speculative traders.

Investors are assessing whether the U.S. dollar index has room for further gains after hitting a 20-year high last week, as much of the Fed’s hawkish stance is already priced in. The U.S. dollar index lost momentum after the Fed decision, which helped push gold prices higher. Subsequently, if some important economic data from the United States does not perform well, it will further promote a further rebound in gold.

Trading strategy deployment: it is recommended to do more at low levels.

All transactions involve risks, the above analysis is for reference only. When placing an order, be sure to set the lot size and remember to set the stop loss.

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Risk Warning : Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. 

Risk Warning:
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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Ultimate Pinnacle Limited is a limited liability company established in Belize as an operating subsidiary within the Lepanto Group of companies (collectively “Ultimate Pinnacle”) under Registration No. 173474 and having its registered address at No. 1 Corner of Hutson Street and Marine Parade, Belize City, Belize.

Lepanto Financial Advisers Limited is the holding company of Ultimate Pinnacle Limited. (Address: Fifth Floor, Suite 23, 63/66 Hatton Garden, London, England, EC1N 8LE). All services and products accessible through the site www.upfxtrade.com are provided by Ultimate Pinnacle Limited with the registered address Suite 305, Griffith Corporate Center P.O Box 1510, Beachmont Kingstown St.Vincent & the Grenadines.
Ultimate Pinnacle Limited is a limited liability company established in Belize as an operating subsidiary within the Lepanto Group of companies (collectively “Ultimate Pinnacle”) under Registration No. 173474 and having its registered address at No. 1 Corner of Hutson Street and Marine Parade, Belize City, Belize.

Lepanto Group Pty Ltd is authorised and regulated by the Australian Securities & Investments Commission, ASIC (ACN: 072 424 830)

Ultimate Pinnacle Limited is a company authorised and regulated by the National Futures Association (NFA ID: 0537666)

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