Global markets choppy after Fed policy announcement - 28.8.2020

The Dollar strengthening has halted currently ahead of the US inflation report at 16:30 CET today. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, added 0.1% Thursday as Labor Department reported continuing claims fell slightly to 14.5 million while 1.01 million Americans filed for first-time benefits. At the same time the second-quarter gross domestic product was revised to a 31.7% drop at annualized pace. GBP/USD joined EUR/USD’s continued sliding yesterday with both pairs higher currently. USD/JPY joined AUD/USD’s continued climbing yesterday with both yen and Australian dollar higher against the greenback currently.

Futures on three main US stock indexes are higher currently after ending mixed Thursday. The three main US stock benchmarks recorded returns ranging from -0.3% to 0.6% as Federal Reserve Chairman Jerome Powell said policy makers would no longer pre-emptively hike interest rates to keep inflation just below 2%. European stock indexes are extending losses today after ending lower Thursday. Asian indexes are mixed currently with Nikkei leading losses after a surprise announcement that Japanese Prime Minister Shinzo Abe will resign for health reasons later on in the day.

Brent is edging lower today. Oil prices fell yesterday despite the US Energy Information Administration report Wednesday that US crude oil inventories fell by 4.7 million barrels last week, the fifth weekly decline in a row while gasoline inventories declined by 4.6 million barrels. The US oil benchmark West Texas Intermediate (WTI) futures ended lower yesterday: October WTI fell 0.8% and is lower currently. October Brent crude closed 1.2% lower at $45.09 a barrel on Thursday.