iFOREX Daily Analysis : December 14,2017

 | Dec 14, 2017 05:08AM ET

The US Dollar traded lower following the US Federal Reserve meeting, where it was agreed to raise the interest rates by 0.25% - a move widely expected in the market. The US Dollar Index (USDX), which represents the US Dollar against six other major currencies lost 0.7% and broke its 6 days streak of rising values.

Gold traded higher following the Fed meeting, rising significantly for the first time in almost 3 weeks. Oil traded lower as gasoline stockpiles in the US were again higher, despite crude stockpiles being lower.

Bitcoin retraced from Tuesday’s high, while Ethereum continued gaining ground. Ripple traded again close to a third higher than on Tuesday and over 100% up compared to last week. Interactive Brokers, which is a major brokerage firm with access to future exchanges, announced that by the end of this week it would allow its customers also to place short bets on Bitcoin futures at the Cboe and later CME – however with a margin requirement of 5$ for every Dollar short bringing the capital requirement of shorting one Bitcoin to around $85,000 at current prices.

Equities in most sectors traded higher in the US, with the exception of bank and other financial stocks as consumer inflation data was below expectations, possibly to some extent limiting the Fed’s ability for future rate hikes.

On Thursday Germany and the EU publish PMI data, France and Italy inflation data. The UK is set to release retail sales statistics, while Switzerland releases its Producer and Import Price Index.

Three central banks in Europe – the European Central Bank (ECB), Bank of England and the Swiss National Bank are set to announce their interest rate decisions. On Thursday import/export prices statistics, jobless claims, retail sales, business inventories and M2 monetary supply figures will be published in the US.

EUR/USD

The Federal Reserve raised the interest rates as expected by 0.25% on Wednesday. However this decision was made with a 7-2 vote by the board – which did not had more than one dissenting vote in such decisions for over a year. The Fed reiterated that they see three rate hikes coming up in 2018 despite positive economic growth. Consumer prices were up by 0.1% less than expected – inflation is one key aspect for central banks to decide on rates policies. On these news the Dollar fell against the Euro by the biggest amount in almost 3 weeks.

On Thursday Germany and the EU publish PMI data, France and Italy inflation data and the ECB is set to make an interest rate decision.

In the US import/export prices statistics, jobless claims, retail sales, business inventories and M2 monetary supply figures will be published.