The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!
What to expect from Fed announcement?
The US dollar has dropped ahead of the Q1 GDP report at 15:30 MT and the Fed announcement at 21:00 MT on April 29. Will it continue falling?
Look at the overall sentiment
These days Jerome Powell, the Federal Reserve chairman, has been the focus of attention. Everyone waits for today’s evening conference. If his statements are optimistic, the US dollar could surge but if he expects slower recovery, that could push USD down and turn traders to other safe-haven currencies like JPY or commodities like gold.
Pay attention to their pace of asset purchases
Nobody anticipates any new measures. This meeting will be about the actions that have been already taken and their results. Among them are asset purchases, quantitative easing programs and low rates. According to Michael Gapen, chief US economist at Barclays in New York, the Fed is slowing down bond purchases as the market environment is improving. It’ important to pay attention to their pace of asset purchases, as we can get some clarity on how long the central bank expects to keep supporting the economy.
No change in rates
In March the FOMC claimed it would keep US interest rates close to zero until the economy shows some kind of rebound. Also, Mr Powell said rates would not go negative as it would be inappropriate for the US. That’s why rates should stay unchanged today.
According to the Fed chairman, the output was likely to decline substantially in the second quarter before bouncing back in the second half of the year. However, the Fed will not release official guidelines until June. We can just look for some hints.
What will happen? The US Q2 Gross Domestic Product will be announced at 15:30 MT time (GMT+3) on Thursday, July 29…
Today the Fed will make a policy statement at 21:00 GMT+3. This event will affect all the currency pairs with the USD and thus almost the all Forex market!
The Reserve Bank of Australia (RBA) will hold a meeting and announce changes to the monetary policy on August 3, at 07:30 MT time (GMT+3).
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.