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ZFX: Profit taking was dominated as investors await the meeting of FOMC - Zeal Capital Market

ZFX: Profit taking was dominated as investors await the meeting of FOMC

16-09-2020 07:50

On Wednesday, the European trading session are expected to open mixed, following the momentum of the Wall Street overnight and the Asian markets move.

Investors are focusing on the FOMC’s meeting. Besides the update of the GDP, unemployment situation and inflation prediction, the Fed may further hint its policy stance and rate expectations. The meeting's result is scheduled as the afternoon of Wednesday in the US.

ZFX analyst Jacob Leung said that, it may be just a “lackluster” night. The latest policy directions, like inflation tolerance, low rates for longer period, have been fully expected by investors since the Jackson Hole symposium. The market would have no surprise with a relatively gloomy stance on the economy from the Fed.

TikTok news is one of the key concerns under the growing tensions between China and the US. President Trump said that he will review the TikTok "cooperation" transaction soon. On Tuesday, the World Trade Organization (WTO) stated that the US tariffs on Chinese imported goods violated the trade rules.

In FX market, the dollar was just mixed against the major currencies. RMB was up to a 16-months high, that the dollar against the offshore RMB fell to 6.78 level, as the economic data in China beat the expectations. On the other hand, gold price dropped sharply in the US trading session on Tuesday, without any significant bearish drivers.

ZFX analyst Jacob Leung said that the drop of the greenback was just “partial”, reflecting a mixed market with variables. It is believed that the unwinding of some positions caused the irregular “ups and downs”, or even sparked profit takings before the FOMC. Of course, we can’t rule out any speculative move, especially under the cautious sentiment.

Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.