The Fed is ready to start tapering in November. Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
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.
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
The crypto market keeps recovering. Bitcoin has broken above $57,000. The way up to $60,000 is open now!
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).
Great Britain will publish the Inflation Rate on October 20, at 09:00 MT time (GMT+3).
The bullish movement in the stock market is gaining speed, and Bitcoin ETFs are closer than they might seem. What do we need to know for the next trading week?