Fed Chair Jerome Powell will testify today at 19:05 MT time. This event is crucial for traders as the tone of the speech may set the risk tone for the markets for the next two weeks.
Trade the USD on the extreme volatility
The Federal Reserve will make its monetary policy statement and announce the official rate on December 19, at 21:00 MT time.
The market anticipates the rate hike from 2.25% to 2.5%, as was suggested during November's meeting. If the Fed increases the interest rate, it will be the fourth rate hike in 2018. In addition, the tone of the statement by the Fed Chair Jerome Powell may provide the volatility to the US Dollar. During the last month, a few members of the Federal Open Market Committee pointed on the increased uncertainty regarding the effects of current fiscal and trade policies on economic activity and inflation. Also, they told not to underestimate the current trade tensions with China. These comments made traders worried. The current Fed statement is anticipated to shed light on its future monetary policy.
• If the Federal Reserve increases the interest rate, the USD will rise;
• If the Federal Reserve leaves the interest rate unchanged, the USD will fall.
Non-farm payrolls, the most awaited economic report, will be out on March 5 at 15:30 MT time.
Australian GDP rose by 3.1%, exceeding analysts’ forecasts of 2.5%. The Australian dollar climbed after the release, but then joined its peers in falling against the USD.
Great news for oil bulls! OPEC and its allied producers agreed to expand output cuts for the next month.
The USD skyrocketed after Fed Powell’s speech. OPEC and allied producers agreed to extend production cuts for another month. Oil surged.
The European Central Bank publishes its monetary policy statement that includes an announcement of the interest rate on March 11, at 14:45 MT time.