Spot silver was at $17.689 an ounce in Asian trading on Wednesday. Intraday silver prices since the opening of a moderate rebound all the way, intraday rise to 1.10%, now slightly down from the high, but the overall hold intraday rise.
Fed chairman Colin Powell will hold a press conference at 02:30 a.m. Thursday Beijing time ahead of the fed’s decision on interest rates.
After holding emergency meetings in March, cutting interest rates to near zero and launching a series of credit programs, the Fed is not expected to make a major policy decision when it concludes its two-day meeting on Wednesday.
Notably, Fed policymakers will release their first economic forecasts since December. The forecasts, due in March, were shelved because the economic fog was so thick that policymakers saw no point in guessing the outlook for unemployment, inflation and growth.
Risk confidence in markets has erupted recently, stocks have surged and the Fed meeting is likely to weigh in on recent signs of economic recovery. In addition, attention should be paid to widely speculated yield curve controls and negative interest rates.
Michael Feroli, an economist at jpmorgan in New York, said that while the U.S. labor market appears to be improving, he expects the Fed to maintain its broadly biased view and that there are significant risks in the future.
“While we see some recent momentum against the dollar taking a breather, we are not prepared to buy the dollar until we hear from Powell and his colleagues,” Wells Fargo said in a research note. If the Fed continues to say no to negative rates and seriously avoids opening the door to yield curve control, we could see the dollar continue to rally.”
U.S. stocks appear to have entered “Fed resolution mode,” said Jasper Lawler, head of research at London Capital Group. Allianz’s chief economic adviser said the Fed had done enough and it was time to “sit tight”.
At the same time, although does not expect the fed to make a major adjustment, but the recent yields rose $has pushed up, because there are more and more signs that the U.S. economy is stabilizing, but from the impact of a full recovery is still very far away, the market speculation the fed may take measures on policy meeting, to suppress the recent rally in bond yields. Some analysts played down the possibility that the Fed would take yield curve controls to guide the 10-year Treasury yield lower, but uncertainty over the outcome of the Fed meeting could continue to weigh on the dollar.
“As the US economy has passed the crisis and is just beginning to recover, the Fed’s control of the yield curve can wait and see,” said Masaaki Yamamoto, chief currency strategist at Mizuho Securities. “The market is over-optimistic and is adjusting downwards, but this is a good opportunity to buy the dollar on dips.”
“The Fed will use both forward guidance and yield limits in September,” said Mark Cabana, head of interest rate strategy at bank of America. Once the rebound from the resumption of work fades, it is clear that the recovery will be long and challenging.”
On the daily chart, the U.S. dollar index continued its downward trend, with the MACD green momentum slightly narrowed and the KDJ random index slightly under pressure, indicating that the downward momentum of the U.S. dollar is still in place but on hold and the overall weakness remains unchanged.
In the 4-hour chart, the DOLLAR index struggled in a narrow range at its low, the MACD green momentum column was looming, and the KDJ random index came under pressure, indicating that the short-term momentum of the DOLLAR is still weak and the coming trend will continue to be weak.
Daily chart, silver launched a modest rebound, up close to the 200 – hour average. Meanwhile, the daily chart continued to hold above the major moving averages, but the MACD green momentum column was slightly enlarged and the KDJ random index fell further, indicating that silver still has downward momentum and could fall further.
On the 4-hour chart, silver appears to be finishing in a fairly narrow range, with the MACD red column unchanged and the KDJ random index turning slightly higher, indicating that gold’s short-term rally momentum is ready to move, followed by a small rally.
Fundamentals positive factors:
- According to statistics from Worldometers, as of 08:38 on June 10, the cumulative number of confirmed cases of COVID-19 worldwide has exceeded 7.31 million, with 7,312,198 confirmed cases and 413,003 deaths. In the United States, there have been more than 2.04 million confirmed cases of COVID-19 — 2,045,549 — and more than 110,000 deaths — 114,148.
- On June 9 local time, U.S. infectious disease expert Dr. Fauci warned again that COVID-19 is one of the worst infectious diseases in human history, with no end in sight.
- On the afternoon of June 9, the Ministry of Education issued the first warning of studying abroad this year, reminding students to do a good job in risk assessment and choose to go to Australia or return to Australia for study.
- On June 9, the DPRK unilaterally announced that it would cut off all communication lines between the DPRK and the ROK, and that it would completely cut off and abolish all communication lines maintained through the Joint Liaison Office between the DPRK and the ROK from 12:00 local time on June 9. South Korea’s Yonhap News Agency reported on June 9 that the Unification Ministry of the Republic of Korea (ROK) said in response to the DPRK’s announcement that all communication channels between the ROK and the DPRK have been closed.
Fundamentals negative factors:
- CNN reported on June 9 local time that the US State Department plans to reopen the US Consulate General in Wuhan around June 22. The State Department has informed Congress.
- A day after New York City reopened for the first time, Mayor Bill DE Blasio gave an update. Calling it an “extraordinary” day in New York City, Mr. DE Blasio said Tuesday that the citywide ratio of novel Coronavirus positive was 1%, well below the 15% threshold. Mr. DE Blasio called it “incredibly good news.”
- On June 8, the Pentagon announced the lifting of the travel ban on five countries and 39 U.S. states. Five are Bahrain, Belgium, Germany, Japan and the United Kingdom. The Pentagon said all 44 countries and the US had “met the conditions for lifting travel restrictions”. California, Florida and North Carolina are among the states not yet eligible to lift travel restrictions.
- New York City will reopen on Monday. The death toll in New York City, which had been enforcing home orders for 78 consecutive days, exceeded all but six countries. New York City, the largest and most densely populated city in the United States, once the epicenter of the outbreak, on Monday entered the first phase of its reopening plan to allow nonessential workers in construction and manufacturing to return to work and retail stores to provide pickup services on the roadside or in stores.