The US Dollar Is Consolidating Before the Fed Interest Rate Decision

The US dollar fell slightly against the basket of major currencies before the Fed meeting. Financial market participants expect the regulator to keep the interest rate at the current level of 2.25-2.5%. However, it is possible that in July the Fed will reduce the interest rate due to the deteriorating situation in the global economy. The US dollar index #DX closed in the negative zone (-0.25) yesterday.

Yesterday, at the annual ECB forum, the head of the regulator, Mario Draghi, said that the Eurozone economy would need new expansionary actions if its future growth and inflation forecasts turned out to be just as weak. The ECB is ready to reduce interest rates and resume asset purchases. US President Donald Trump blamed the ECB, and at the same time, the Chinese government, in an attempt to weaken their national currencies to gain a competitive advantage over the United States.

The British pound is still under pressure due to the possibility of "hard" Brexit. The sentiment of financial markets will depend on the upcoming economic events. Today, the consumer price index will be published in the UK, and tomorrow the Bank of England will decide on the interest rate.

The "black gold" prices are consolidating after a significant increase the day before. At the moment, futures for the WTI crude oil are testing the mark of $54.00 per barrel. At 17:30 (GMT+3:00), a report on crude oil inventories will be published in the US.

Market Indicators

Yesterday, the bullish sentiment was observed in the US stock market: #SPY (+1.05%), #DIA (+1.39%), #QQQ (+1.45%).

The 10-year US government bonds yield rose slightly. Currently, the indicator is at the level of 2.06-2.07%.

- Statistics on inflation in the UK at 11:30 (GMT+3:00);
- Core consumer price index in Canada at 15:30 (GMT+3:00);
- Fed interest rate decision at 21:30 (GMT+3:00).

We also recommend paying attention to the speech by the ECB President Draghi.

by JMarkets, 2019.06.19

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.