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US Dollar Index closed below its 200-day moving average

USD - United States Dollar

The Fed removed the word 'patient' from the official statement at last week's FOMC meeting as broadly expected and stated that they would "act as appropriate to sustain the expansion." The Fed "dot plot" implied that committee members are split on the path forward for rates this year with the median 2019 dots downgraded to no hike, 2020 to one cut and the long-term rate lowered by 25 basis points to 2.50 percent. USD sold off into the weekend verse all major currencies with the US Dollar Index (DXY) and EURUSD finally closing through their 200-day moving averages, after many failed attempts this year. Worldwide stocks and bonds rallied last week after a dovish FOMC meeting and Head of the ECB, Mario Draghi gave markets clear hints that the ECB is ready to launch another round of quantitative easing if needed and cut interest rates into further negative territory. Trump also tweeted he had a ‘very good’ conversation with Chinese President Xi Jinping and that he will have an extended meeting with Mr. Xi during next week’s G20 meeting in Japan, sending equities higher.

Key Movers

Sterling dropped off earlier highs while UK stocks rallied after the Bank of England cut its forecasts for the British economy and held the U.K.’s key interest rate at 0.75 percent. The BoE stated that ‘downside risks to growth have increased’ both in the U.K. and in the rest of the world and that it expects UK growth to drop the zero in H2 2019. Signals of economic weakness, Brexit uncertainty, and both the U.S. and E.U. looking likely to cut their interest rates shortly may put the U.K. under pressure to follow suit.

Expected Ranges

EUR/USD: 1.1365 - 1.1398 ▲

GBP/USD: 1.2708 - 1.2766 ▼

USD/CAD: 1.3176 - 1.3216 ▼

AUD/USD: 0.6928 -0.6961 ▲

NZD/CAD: 0.6585 - 0.6614 ▲