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Here is what you need to know on Thursday, September 17:

A risk-on mood dominates markets amid growing hopes for a Brexit and US stimulus deal and despite no new stimulus from the Federal Reserve. Bitcoin pierced through $22,000 after topping $20,000 and gold is also on the rise. The Bank of England is set to leave its policy unchanged

The Federal Reserve left its policy unchanged, disappointing some that expected an imminent adjustment to bond-buying. On the other hand, the Fed committed to maintaining Quantitative Easing until substantial improvement is achieved.

The dollar strengthened at first before declining. Federal Reserve Chairman Jerome Powell urged lawmakers to act, and his lack of immediate action is seen as raising the chances of an accord. 

  • Powell’s charm offensive soothes markets, but a Santa Rally depends on Congress
  • Federal Reserve Rate Decision: Changing policy targets alters very little

US stimulus: Senate Majority Leader Mitch McConnell continued urging his fellow Republicans to seal a deal, also citing the electoral chances of two GOP senators in the special Georgia runoffs. Other leaders in Congress such as Minority leader Chuck Schumer expressed hope of approving an accord worth some $900 billion.

President-elect Joe Biden also supports an accord and dressed it as only a “down payment” ahead of additional relief in 2021. Gold has advanced toward $1,870.

Brexit talks have made substantial progress on the Level-Playing Field and governance, reportedly leaving only fisheries as a contention point. Despite the minuscule size, the industry has an outsized political impact.

The British parliament is set to go for a Christmas break but could be reconvened if needed. Negotiators remain quiet and refrain from significant leaks, a positive sign. GBP/USD has been extending its gains toward 1.36. 

The Bank of England is set to leave its policy unchanged in its last decision of the year and after adding £150 billion to its bond purchase scheme in November. The BOE will probably commit to doing what is necessary.

The “Old Lady” releases its meeting minutes but Governor Andrew Bailey does not hold a press conference. His colleague Ben Broadbent is slated to speak later in the day.

BOE Preview: Bailey may grant a Christmas gift to pound bulls, assuming no negative rates talk

Bitcoin finally surged above $20,000 on Wednesday and has been extending its gains, topping $22,000 at the time of writing. Scott Minerd of Guggenheim Investments has said it could reach $400,000. Other cryptocurrencies are also advancing. 

AUD/USD is nearing 0.76 amid the upbeat market mood and Australia’s surprising drop in its unemployment rate to 6.8%. The land down under gained 90,000 in November, more than double the expectations. 

NZD/USD is trading above 0.7135, also riding on upbeat data  Gross Domestic Product rebounded by 14% in the third quarter, better than estimated. 

The Swiss National Bank (SNB) is set to leave its Libor Rate unchanged at -0.75% in its quarterly meeting. The US Treasury labeled Switzerland a currency manipulator, a move that has yet to alter the franc’s value. 

US Unemployment Claims are projected to decline from the highs of 853,000 recorded last week, a significant setback. Building Permits and Housing Starts are also eyed. 

See US Initial Jobless Claims Preview: Not the right direction at all

Coronavirus continues raging in the northern hemisphere, with European countries tightening their screws and US hospitalizations hitting new highs. Allergic responses to the Pfizer/BioNTech vaccine counters reports that the vials provided by the project include additional doses. The FDA is set to approve Moderna’s jab in the next few days. 

More Where next for the Fed, fiscal stimulus and Trump