US interest rate decision looms

March 21, 2018

Another busy day for markets, but it is the US where most focus is directed.

The EUR/USD hit struggle street last yesterday as the pair dropped over one cent from its highs. It started the session well, hitting highs of $1.23540 early, before dropping off for most of the session after that. It hit lows of $1.22383 late in trading. It is currently not far off that low, trading at $1.22446. The GBP/USD held up better than its Euro counterpart. It peaked at $1.40663 midway through the session before weakening as well. It weakened to session lows of $1.39804 and then remained somewhat flat after that. It is now trading at $1.40000.

The Dow showed some signs of life, adding some value after some lacklustre performances lately. It fell to lows of 24,604.17 around midway through the session before staging a turnaround. It gained around 200 points as it reached highs of 24,808.98. It is currently trading at 24,770.30. The Dax had strong night of trading, overcoming early lows of 12,187.03 to pile on over 160 points to peak at 12,349.72. It is slightly off those highs, currently trading at 12,342.97.

Turning to events of today and all focus is on the US Fed Reserve’s Federal Funds Rate meeting in the early hours of tomorrow morning. The central bank is widely tipped to raise interest rates, but the real interest surrounds the language used by Fed Chair, Jerome Powell, when discussing monetary policy settings. Economic outlook will also be discussed at this meeting, so it will be vital for markets and traders to listen to what the new Fed Chair has to say in this regard. Accompanying the interest rate decision is the FOMC Rate Statement and the FOMC Press Conference. This meeting takes on more significance as the quarterly FOMC Economic Projections is also released. This meeting could well cause some volatility with USD-paired currencies as well as the Dow. Other data set for release today includes:

Japan – Bank Holiday

Australia – MI Leading Index

NZ – Credit Card Spending, Official Cash Rate, RBNZ Rate Statement

US – Existing Home Sales, Current Account, Crude Oil Inventories

Europe – Swiss National Bank Quarterly Bulletin

UK – Average Earnings Index, Claimant Count Change, Public Sector Net Borrowing, Unemployment Rate, CBI Industrial Order Expectations


Disclaimer: The information in this website is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs. Accordingly, before acting on the advice, you should consider the appropriateness of the advice having regard to your objectives, financial situation and needs. We recommend you seek independent advice if necessary.