Fed kept interest rates on hold at low levels and said “the pace of contraction of the economy appears to be somewhat slower” in spite of a report that US contracted at 6.1% more than median forecast of 4.8% contraction (three consecutive falls).
US stocks rose after Fed comments and on hopes that the recession is easing and economy is recovering.
Swine flu concerns seem to have eased despite WHO raising the pandemic alert level to Phase 5. Pork prices dropped almost 10% since outbreak.
USD fell on rising risk appetite and higher yielding currencies rallied sharply against the USD and the JPY. Euro also supported by improvement in Eurozone business and consumer confidence.
Gold is trading near the 900 USD levels with cautious outlook ahead of next week’s developments. Gold pressured by rising stocks and weak inflation outlook.
Oil prices rose tracking US stock markets. Gasoline stocks draw down to 4.7 million barrels – EIA also supported the oil climb.
Markets focus turns to stress test results of top 19 US banks on Monday and on further news from the US auto industry. Investors will also eye the ECB and BOE rate decisions next Thursday.
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