USD Declines Ahead of US FOMC Meeting

On Monday, the U.S. dollar declined against most major currencies as markets are awaiting the outcome of the Federal Reserve's policy meeting starting later in the day. The U.S. dollar index, which measures the greenback against a basket of six major currencies, fell to 101 pips.

Markets are expecting that Fed could hike rates by 25 basis points.

Also on Monday, USD rose vs. JPY and touched its highest levels as the benchmark 10-year treasury yield popped above the 2.5% threshold on a surge in oil prices. The Greenback touched ¥116 before declining to the support of ¥115.

Gold prices recovered yesterday, positively affected by lack of U.S. data and settled at $1,160 recovering from $1,150.

The precious metal is unlikely to trade widely during the day as it could touch the resistance of $1,170.

The Sterling pound rose to $1.27 vs. the Greenback. GBP is awaiting the UK Inflation Rate, which is expected to grow by 1.1%. Such expectations could promote BOE’s vision of keeping the interest rates and monetary stimulus programs by 375 billion unchanged.

Euro failed to settle at $1.0640 vs. USD in anticipation of the German ZEW index of economic sentiment. Technically, the common currency is unlikely to trade above $1.0670 during the day.

Oil prices touched 17-month highs after non-OPEC producers have agreed to cut their production. U.S. crude settled at $55 before declining to $53. Technically, it could re-test $55 and settle above such levels during next time.

The most important economic events:

GBP Consumer Price Index (YoY) (NOV): (GMT 11:30) – Important – forecast (1.1%) – Previous (0.9%).
GBP Core Consumer Price Index (YoY) (NOV): (GMT 11:30) – Important – forecast (1.3%) – Previous (1.2%).
EUR Euro-Zone ZEW Survey (Economic Sentiment) (DEC): (GMT 11:30) – Important – forecast (N/A) – Previous (15.8).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.