Gold and Euro drop as Powell's hawkish comments suggest no aggressive rate cuts

From Investing.com: 2024-10-01 04:24:00

Gold declined by 0.89% as Federal Reserve Chair Jerome Powell gave hawkish comments, suggesting no guarantee of future aggressive rate cuts. Despite strong US economy, gold is on track for largest quarterly gain since 2016 due to Fed cuts, Middle East tensions, and China’s stimulus. XAU/USD dropped as USD strengthened but closed September with a 5.4% gain. Geopolitical tensions persist but gold struggles to find bullish momentum.

The euro fell 0.26% against the USD after Powell’s speech was perceived as hawkish, lowering the probability of a 50-bps rate cut in November. EUR/USD trading around 1.11920, eurozone CPI data due. A stronger US dollar may push EUR/USD below 1.11000.

British Pound remained mostly steady amid Powell’s speech cautioning against significant rate cuts, anticipating only 0.25% reductions. Expectations for a 50-bps rate cut in November dropped. GBP/USD range-bound, awaiting US ISM Manufacturing PMI data for direction.



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