As the email scandal broke out again in the US election, Hillary's approval rating was instantly overtaken by Trump. Affected by this, the U.S. dollar index fell sharply and the price of silver rose. However, we must realize that the impact of the US election is only temporary, and the actions of the Federal Reserve are the key to long-term impact on silver prices. The market is currently focused on U.S. economic data and Fed news.
Don’t go astray! The movements of the Federal Reserve are the key to determining the rise and fall of silver
The Federal Reserve raises interest rates
Unlike many experts who are certain that interest rates will be raised this month, three traders have warned traders that the Fed will raise interest rates at the end of the year. The widespread expectations of rising temperatures are entirely misleading. He further stated that the Federal Reserve will also choose to keep interest rates unchanged at its meeting on October 1.
History also seems to be on the side of these three traders. Fed officials began the year predicting four rate hikes this year, but those expectations have been downgraded time and time again amid disappointing economic data. The New York Fed's manufacturing index unexpectedly fell in month. The U.S. Department of Labor report showed that the monthly increase in core inflation was less than expected, and orders for U.S. business equipment recorded the largest decline in a month. Even as the U.S. economy accelerated in the third quarter, consumer spending growth was only about half of the previous quarter, while business equipment investment fell for the fourth consecutive quarter.
Economists say: This is not the first time the Fed has led people to believe they will raise interest rates. Whether to raise interest rates will depend on economic data.
Economists at the three banks said that although they reserve the right to revise their forecasts based on new data in the next six weeks, they currently believe that the Fed needs to see clearer signs of economic upturn and inflation accelerating. Will decide to raise interest rates.
HSBC’s chief U.S. economist in New York said: There are reasons to be cautious at the moment. Slow U.S. economic growth, low inflation, and the global impact of the British decision to leave the European Union. There are many problems around the world. There are signs of deceleration, and the risk of tightening monetary policy in this case is too great.
The New York Fed manufacturing index unexpectedly fell in month. The U.S. Department of Labor report showed that the monthly core inflation rose less than expected, and orders for U.S. business equipment recorded the largest decline in a month. Even as the U.S. economy accelerated in the third quarter, consumer spending growth was only about half of the previous quarter, while business equipment investment fell for the fourth consecutive quarter.
Economists say: This is not the first time the Fed has made people believe they will raise interest rates. Whether to raise interest rates will depend on economic data. At the same time, Goldman Sachs Asset Management wrote in a report to clients on Friday that if the dollar-weighted exchange rate indicator rises to the level in March, the Federal Reserve is likely to keep interest rates unchanged. The indicator is currently at its highest level since March.
The report shows: In view of the impact on the financial environment, the Federal Reserve has expressed concerns about the strength of the US dollar. Tense financial conditions are one of the reasons why the Federal Reserve delayed its first interest rate hike, and we believe the same concerns may resurface if the dollar returns to its monthly level.
Since the beginning of the month, the Bloomberg Dollar Index has increased by .%, and is expected to record its largest monthly gain in the past month. The current monthly interest rate hike expectations are as high as 1%, so the US dollar faces a greater risk of downside surprises.
At present, silver prices have opened up room for growth and are rebounding steadily, and the Federal Reserve interest rate decision this month is likely to remain unchanged in line with market expectations. Then all suspense will remain until next month, when the Federal Reserve may repeat its history of raising interest rates last year. Before that, the price of silver may recover its monthly decline and welcome the interest rate hike in the US dollar. If interest rates are raised at the end of this year, then judging from the trend of silver after the interest rate hike last year, the operating space of silver prices next year should be above the US dollar. .
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