The head of the Federal Reserve Jerome Powell will testify on the Semiannual Monetary Policy Report on Tuesday and Wednesday
Greenback stays below 19-month maximums with Fed in focus
On Monday, the evergreen buck was intact staying below 19-month maximums versus a group of its primary rivals. It’s because worries over the outlook for global surge kept market sentiment suppressed ahead of this week’s Fed policy gathering.
Indicating the US currency’s purchasing potential versus its main counterparts the USD index stuck with 96.86, which is below the 19-month maximum of 97.70 it reached on Friday.
On Friday, the evergreen buck rallied broadly following firm economic data, which showed that the American economy was in better shape than its counterparts.
Weaker-than-anticipated economic data from the Europian bloc and China as well as worries of a probable American government shutdown have also backed safe haven demand for the evergreen buck.
Market participants were looking ahead to the approaching Fed gathering, with the key US financial institution generally expected to have rates raised for the fourth time in 2018 when it delivers its latest policy verdict at the conclusion on its two-day gathering on Wednesday.
The key US bank has increased interest rates up to eight times since December 2015 with the aim of restoring its policy to more normal settings having slashed borrowing costs to zero in order to withstand the financial meltdown last decade.
With the lift mostly factored in by the market, greater moves in the evergreen buck are going to be guided by the major bank’s forward guidance.
By the way, recent remarks by Fed representatives have been perceived as dovish by some experts. In November, Fed Chairman Jerome Powell told that interest rates were approaching the range of policymakers' forecasts of "neutral." That’s the level at which they neither back nor impede the American economy.
Versus the Japanese currency, the greenback rallied. The currency pair USD/JPY surged to 113.45.
The United States will publish the non-farm employment change, also known as non-farm payrolls (NFP) at 15:30 MT time on February 7.
The level of non-manufacturing PMI for the United States by the Institute of Supply Management will be published at 17:00 MT time on February 5.
The Federal Open Market Committee will publish its meeting minutes on February 19, at 21:00 MT time.
Will coronavirus continue keeping the markets in fear? What releases should we wait for? Find out in the news!
Tesla stock drops in premarket trades on Thursday. Why? See the article (it's short) and use it to your advantage.