At the Wednesday announcement and the press conference the Federal Reserved surprised investors by holding the monthly stimulus at the current level of $85bn. The majority of analysts has expect the FOMC to vote to begin to taper at the September meeting, with the size being in dispute.
The decision was released at 19:00 (London) with an accompanying statement followed by a press conference at 19:30 with Fed Chief, Ben Bernanke.
The unchanged level of monthly bond-purchased had caught many investors by surprise, leading to a sharp move in many markets. The USD was sold across the board, and giving a boost to EMFX following the recent rout. The yellow metal was heavily bid, up over $70 in the hours following the event, reversing the recent downward trend.
Post-Fed day hangover— Also sprach Analyst (@theanalyst_hk) September 19, 2013
Spot Gold Chart
Gold's $55 surge yesterday was its 5th biggest rise in dollar terms since 1980, and its 8th biggest rise EVER.— Jamie McGeever (@ReutersJamie) September 19, 2013
The Fed’s decision to leave stimulus unchanged, led to the USD being sold across the board, and gave a boost to cable, pushing the pair to the highest level since 14th January 2013. Sterling was already trading at 8-month highs prior to the release as markets believe the UK economy is “turning a corner”. To sustain the move, and potentially take a leg higher this morning’s Retail Sales data released at 9:30am (London).
The FTSE 100 cash index opened up +1.20% at 6637.73, following the move in the US, as the S&P 500 reached new all-time highs, as stimulus was left unchanged.