About FOMC meeting

Amir Khedri Independent Analyst

Today’s FOMC meeting is going to be one of the most important market movers in the current month (The statement and Dot-plot will be released at 7 pm (GMT) and the press conference will be held thirty minutes after that). We expect FED to keep the interest rate at the current level which is 2.25%-2.5% but, market has prepared itself to hear some dovish tone from Jerome Powell.

CPI and core CPI still has remained below the Federal Reserve’s target and the manufacturing PMI has fallen to 50 which has increased the downside GDP risk.

In the last Federal reserve’s Dot Plot which was released in May, the majority of governors voted for maintaining the interest ratetill the end of the year but, four of governors voted for one rate hike in 2019 and two of them voted for two rates hike in 2019. We expect those governors who voted for hiking, shift their opinions to dovish and vote for a rate cut in July or even another one in September, which may boost EURO against the US dollar. On the other hand, President Trump has clarified many times that comparatively lower interest rates for the euro give other countries an advantage over the U.S and he’s increased pressure on the Federal Reserve, specifically on Jerome Powell to stop the QT program. In my opinion, today’s FOMC meeting will not send an aggressive message to the market and even if the FED wants tocut the interest rates for the rest of the year, still the economic situation of the United States is much better than Europe. In the previous day Mario Draghi announced more stimulus could come becausethe EU inflation has muted and still there is no sign of any improvement could be seen from the EU. So, if the FED sends dovish message to the market, the US Dollar may get weak, but, the weakness of the US Dollar will be temporary.

Germany manufacturing PMI at the lowest level since 2012

Germany GDP Annual Growth Rate at the lowest level since 2014

The trend of the US dollar index is up. 97.55 is a very important support level.

If the DXY drops below 97.5, it will fall to 96.7 (next important support level) but, if it starts to rise again, 98.1 will be next target. It all depends on today’s FOMC meeting.

Author

Amir Khedri

Independent Analyst

Amir Khedri, the FX market analyst, lives in Tehran (Iran).

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.