According to Bloomberg the FED Chairman Jerome Powell took central bank’s “dot plot” as a guide to apply future interest rates. On the other hand Wall Street probably will not be affected by the fact.
The Fed will conclude their 2 day meeting later on Wednesday. The meeting will probably have the results that many widely expected that are to hike rates for the second time this year. Powell will begin his press conference 30 minutes after 2 p.m.
The market now ıs also focusıng on Feds giving clues about applying tightening policy up to four times in 2018. They already applied the tightening policy three times earlier this year. The reasoning behind the hikes probably is because of the steady expansion of their economy.
One the other hand the accelerating growth and inflation might also ignite a more aggressive tightening policy with weak wages increases.
Now Bloomberg surveyed Economists predict that the FOMC will probably stay with its March prediction of three hikes this year in the updated quarterly forecasts.
Steven Ricchiuto, chief U.S. economist at Mizuho Securities said “there is a risk that the dots go up a tad, not down”. “All you need is for one to change. There has been enough strength in the economy”
According to Investing.com the Dollar index (DXY) versus a (basket of six major currencies) went up about 0.09% and reach the 93.888 level after the rising of about 0.25% the day before.
Dollar also reached its highest level 110.68 versus JPY since May 23 and went up almost 0.25%.
Masafumi Yamamoto, the chief forex strategist at Mizuho Securities in Tokyo stated that "There are views that the recent emerging markets turmoil could hold back the Fed from quickening the pace of its rate hikes. So the dollar would benefit if the Fed actually signals readiness to hike four times this year"
Masafumi Yamamoto explain why the EUR recently fell by saying that ECB will probably not willing to hasten any policy normalization and he believe that such expectations are overdone, but also the meeting will disappoint those that expecting for hawkish rhetoric which would explain the euro's recent weakness.
The euro was sideway at about $1.1740 after sliding down to 0.35% during the night.
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Marios Athinodorou is TeleTrade’s market analyst and commentator. Apart from being an experienced trader, Marios is an advanced technical analyst and is interested in trading psychology. He has 7 years of trading expertise in Forex and CFDs, providing insights to share with all kinds of traders, from beginners to experts.Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars, here.
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