Global markets are focusing on the Fed as new announcements will start at 18:00 GMT. Meanwhile the USD is trading a bit lower while Gold prices gain strength. GBP/USD hit 15-months high earlier after solid data from the United Kingdom. Check out all you need to know for today.
1. Eyes on the Fed
The Federal Reserve is widely expected to leave interest rates unchanged at its current range of 1.00% to 1.25% in its announcement at 18:00 GMT on Wednesday and also reveal its plans for the winding down, or tapering, of its asset purchases in order to begin, likely in October, the reduction of its $4.5 trillion balance sheet.
Market participants will pay particular attention to the Fed’s updated economic projections and, particularly, the dot plot that anonymously maps out policymakers’ individual forecast for interest rates with an eye towards whether tepid inflation has forced the central bank to give a more dovish outlook on the future path of interest rates.
Investors will look for further details and clarification from Fed chair Janet Yellen’s press conference at 20:30 GMT.
2. Dollar and Gold at opposite ways
The dollar remained broadly lower on Wednesday, as investors awaited the Fed’s highly-anticipated monetary policy decision due later in the day.
Despite the fact that the U.S. central bank was expected to announce a historic decision with the unwinding of its balance sheet, sentiment in the greenback remained weak.
Ahead of the data, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dropped 0.16% at 91.47 by 10:02 GMT.
Conversely, Gold benefitted from dollar weakness, while investors waited for the monetary policy details. The precious metal also strengthened amid potentially higher tensions between the U.S. and North Korea following harsh statements from U.S. President Donald Trump.
In his first speech before the United Nations General Assembly on Tuesday, Trump said "the United States has great strength and patience, but if it is forced to defend itself and its allies, we will have no choice but to totally destroy North Korea."
3. British Pound nears 15-month high
The GBP (Cable) briefly broke through the $1.36 handle on Wednesday as strong retail sales out of the UK increased conviction that the Bank of England would follow through with a rate hike at its next meeting in November.
The pound moved higher after the UK Office for National Statistics reported on Wednesday that retail sales blew past forecasts in August, increasing 1.0%.
GBP/USD hit an intraday high of 1.3607, re-approaching Monday's 15-month peak of 1.3620. At 10:04 GMT, it was last off session highs, up just 0.285% at 1.3538.
4. Global stocks await updates
Global stocks hit record highs again on Wednesday in what was nevertheless subdued trade as markets awaited the Fed monetary policy decision.
U.S. futures pointed to a flat open Wednesday in cautious trade ahead of the week’s main risk event. Elsewhere, European bourses also balked from making bold moves, registering mixed signs.
Earlier, Asian shares closed with mixed signs as investors awaited the U.S. central bank’s decision. Japan’s Nikkei closed flat, while China’s Shanghai Composite managed to pocket gains of 0.3%.
Meanwhile, Oil prices gained on Wednesday after Iraq's oil minister said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut and investors turned their attention to official weekly oil inventory data.
