Fed is the main event of the day. Traders expect the monetary policy statement to hint a rate hike in December while the USD was traded mixed versus the G10 currencies. USD/CAD rose sharply following the negative Canadian GDP while GBP soared due to positive developments on Brexit negotiations ahead of the crucial BoE meeting tomorrow.
Fed: The Event of The Day; Will They Hint a Rate Hike for December?
The U.S. dollar has been traded mixed against the G10 currencies on Tuesday and early Wednesday, before the Fed meeting announcement later in the day. The U.S. central bank is expected to keep the current monetary policy unchanged with funds rate at 1.25%, however, market participants expect hints for a rate hike in the next policy meeting in December. If Fed fails to be hawkish in this meeting, we will see a strong sell-off of the dollar. Traders will hang on every word of the monetary policy statement. Moreover, as we are two days before the NFP, the ADP employment and the manufacturing PMI for the U.S. will be closely monitored.
Looking to the news, the S&P/Case-Shiller home price indices for August rose by 5.9% from 5.8% before, however, it fell short of forecasts of 6.0%. The Chicago Purchasing Managers’ Index rose to 66.2 in October beating market expectations of 61.0 from 65.2 in September.
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