US futures declined even as the market received positive corporate earnings from companies like Microsoft, Tesla, and Facebook. Futures tied to the Dow and Nasdaq declined by 165 and 44 points respectively. Tesla made a net income of $105 million, which was lower than $140 million a year ago. Nonetheless, the market was excited about the company’s increased deliveries and plans to launch the Model Y earlier than expected. Facebook’s revenue rose by 25% to $21.1 billion. This was higher than the consensus estimates of $20.9 billion. Microsoft reported upbeat results on its cloud division. Its overall revenue rose by 14% to $36.9 billion.
The US dollar index was relatively unchanged as the market reacted to the Fed interest rates decision. The bank left rates unchanged at 1.75% as was widely expected. It also reaffirmed that it will not make any tweaks to rates this year. This will give members time to observe how last year’s rate cuts cushioned the US economy. The rate of inflation is below the Fed’s target of 2% and unemployment has remained at 3.5%, which is the lowest level in decades. The monetary policy statement was mixed. For example, the statement said that consumer spending growth was moderate. This was a downgrade from “strong” in December. It also said that business investments remained weak.
Sterling was unchanged against the USD and EUR during the Asian session. The currency will be in the spotlight today as the Bank of England is expected to deliver its interest rates decision. The bank is expected to leave interest rates unchanged at 0.75%. As such, the market will want to hear from Mark Carney, who will deliver his final statement today. In recent days, there have been rumors that the central bank will cut interest rates because of the weak inflation and retail sales data released this month.
EUR/USD
The EUR/USD pair rose after the Fed delivered its rates decision. The pair rose from a low of 1.0990 to the current 1.1015. The pair has been on a steep decline since the year started. The price is along the 14-day exponential moving averages and slightly below the 28-day moving average. The RSI has been moving higher. The same is true with the moving average of oscillators. The pair will likely resume the previous downward trend.
GBP/USD
The GBP/USD pair was unchanged during the Asian session. The pair is trading at 1.3015, which is slightly higher than yesterday’s low of 1.2975. The price is slightly below the 23.6% Fibonacci Retracement level. It is also forming a small symmetrical triangle on the hourly chart. This triangle pattern could lead to a significant breakout later today depending on the BOE decision.
AUD/USD
The AUD/USD pair declined to a low of 0.6730, which is the lowest level since October 23. The signal and main line of the Stochastic Oscillator are at the oversold level. The price is below the 20-day and 9-day variable index dynamic average. The price is along the lower line of the Bollinger Bands. The pair may continue moving lower today.
