As widely expected, the US Federal Reserve kept interest rates unchanged on its June’s meeting and signaled that it still plans gradual tightening in the second half of 2016. However, Fed’s stance regarding the interest rates is softer, as labor market improvement runs at lower pace and slower economic growth made the Fed to trim this year’s growth forecast from projected 2.2% to 2.0%, also lowering growth forecast for the next year to 2.1%.
Fed’s Chair Janet Yellen said that Fed needs clear signs of economic strength before lifting rates. A number of FOMC’s policymakers voted for only one rate hike by the end of year, against Fed’s advertised policy at the beginning of the year, when four rate hikes in 2016 were signaled.

The US dollar fell against its major counterparts, on immediate reaction after Fed’s announcement. The Euro spiked to 1.1300 resistance zone, while the greenback spiraled against yen, which is also boosted by its safe-haven appeal on Brexit fears. Dollar fell to the lowest levels since August 2014 against Japanese currency, trading around sessions lows at 103.50 zone.
One of top gainers was gold, which surged above strong $1300 barrier, lifted by dovish Fed in and rising demand on Brexit’s uncertainty.

Bank of Japan’s monetary policy meeting was next of week’s most significant events. BOJ refrained from offering additional monetary stimulus despite weak inflation and external headwinds. The decision of With Japanese central bank’s decision making no surprise in the markets, yen continues to rally on strong dollar sell-off.
BOJ left unchanged negative interest rate at -0.1% and maintained its massive asset-buying programme.

The US dollar stays at fresh lows at the beginning of European session, with some profit-taking actions expected.

Swiss National Bank left interest rate unchanged at -0.75% on Thursday’s monetary policy announcement, stating that the central bank remains active in foreign exchange market to influence monetary conditions, also seeing growth forecast unchanged at 1.0% – 1.5% in 2016.

Today’s highlights

Thursday’s economic calendar is full. As Fed and BOJ made no surprise, Australian jobs data were upbeat. Unemployment rate stayed unchanged at 5.7% in May, employment change jumped by 17.9K in May, against forecasted 15.0 K and downward-revised April’s 0.8%.
Aussie dollar jumped against greenback on positive data but fell around 100 pips on risk aversion and strong demand for safe-haven yen that dragged AUDUSD and AUDJPY pairs significantly lower.

UK’s Retail Sales for May are expected to fall, according to the forecast at 0.3% against April’s 1.3% release. Data are due at 08:30 GMT.

Eurozone’s inflation is expected to stay unchanged in May (CPI -0.1% f/c vs Apr -0.1%) and Core CPI forecasted unchanged at 0.8% in May. Release is due at 09:00 GMT.
Bank of England’s minutes of the previous meeting and Interest rate / QE decision are due at 11:00 GMT, with forecasts showing no changes in the policy (interest rate at 0.50% and 375B QE), ahead of historical referendum of Brexit, which is due next week.
US inflation data and weekly jobless claims are the highlight of the America’s session. Monthly inflation is expected to tick lower to 0.3% in May, from April’s 0.4%, while Core CPI is seen unchanged at 0.2% in May.
US Weekly Jobless Claims are expected to rise by 3K in the week behind, according to forecast of 267K, compared to previous week’s 264K release.
Both releases are due at 12:30 GMT.
Important levels

GOLD is top performer of the day for now, as it surged above strong barrier at $13000 zone, boosted by soft Fed’s tone and on increasing demand.
Bullish technicals support further gains after $1303/07 breakpoints were taken out, with the action also being boosted by rising global uncertainty.
Next target lies at $1344, ahead of $1392 and psychological $1400 barrier, which could be revisited in the coming sessions.
Former barriers at $1300 zone, now act as immediate supports, followed by $1288 and $1283, which offers solid support.
USDJPY fell sharply and hit fresh nearly 2-year low at 103.50 zone, as yen received strong boost on weaker dollar and rising demand on risk aversion.
Loss of former strong support at 105.53 has opened way for bearish acceleration which eyes 100.80 higher platform and psychological 100.00 support.
No significant barriers are seen before 105.53, above which comes 106.00 (session high), which is expected to cap extended corrective actions.

US CRUDE OIL remains under pressure and extends five-day descend, driven by rising fears of Brexit consequences and US Weekly Crude Stocks that were released on Wednesday and showed lower than expected draw in US stockpiles.
Oil probes below $47.34 which was initial target and strong support, with further bearish acceleration seen towards next significant support at $46.32.
Initial resistance lies at $47.73, ahead of $48.00 and $48.70., Market Analysis