The Federal Open Market Committee (FOMC) is undergoing a monetary policy meeting and will announce its latest decision today at 18:00 GMT. Meanwhile, the US dollar has been on a franc decline ahead of the event, undermined by a better perception of risk, FXStreet’s Chief Analyst Valeria Bednarik informs.
Key quotes
“The Fed is widely expected to keep rates on-hold, alongside the hip load of stimulus programs, meant to keep the economy afloat throughout the ongoing coronavirus-related crisis. The focus, then, will be on Fed Chairman Jerome Powell’s statement and press conference, as speculative interest will try to figure out what policymakers could do next.”
“Regarding growth, there are no doubts that the economy will contract this year, although is yet to be seen the extent of it. A mild recovery is expected for 2021, and the Fed will have to continue to support the economy until there are signs of economic recovery.”
“Up to now, the market is expecting rates to remain at the current levels until at least the first quarter of 2021. Any sign that rate hikes could take place before that they would be quite a positive clue.”
“Despite the gloomy economic figures from the last couple of months, the focus shifted to economic recoveries. It will be the speed of this last in the eyes of the FOMC that will move the market. Further rallies in Wall Street on an optimistic outlook, will likely keep the greenback under pressure.”
“Risk-off after the announcement would favor safe-haven assets, the dollar included. Gold could be the biggest winner in this scenario, as its refugee condition will couple with the excess of liquidity provided by central banks.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD dips below 0.6600 following RBA’s decision
The Australian Dollar registered losses of around 0.42% against the US Dollar on Tuesday, following the RBA's monetary policy decision to keep rates unchanged. However, it was perceived as a dovish decision. As Wednesday's Asian session began, the AUD/USD trades near 0.6591.
EUR/USD lacks momentum, churns near 1.0750
EUR/USD cycled familiar levels again on Tuesday, testing the waters near 1.0750 as broader markets look for signals to push in either direction. Risk appetite was crimped on Tuesday after Fedspeak from key US Federal Reserve officials threw caution on hopes for approaching rate cuts from the Fed.
Gold wanes as US Dollar soars, unfazed by lower US yields
Gold price slipped during the North American session, dropping around 0.4% amid a strong US Dollar and falling US Treasury bond yields. A scarce economic docket in the United States would keep investors focused on Federal Reserve officials during the week after last Friday’s US employment report.
Democrats to introduce bill targeting crypto mixing services
Rep. Sean Casten revealed in a House hearing on Tuesday that Democrats are planning to issue a bill this week that would target crypto-mixing protocols. Democrats and Republicans also clashed over the SEC's recent action against crypto companies.
Living vicariously through rate cut expectations
U.S. stock indexes made gains on Tuesday as concerns about an overheating U.S. economy ease, particularly with incoming economic reports showing data surprises at their most negative levels since February of last year.