Event Preview: FOMC June Monetary Policy MeetingThe FOMC decision (June 16, 6 pm GMT) is set to be a major event of the week, so if you are trading this high-end cluster, start preparing better.
What happened before, how the dollar reacted, and what is expected this time.
No bombshells in April FOMC meeting FOMC's previous statements did not completely eliminate the socks of the markets, as the US Federal Reserve kept interest rates unchanged and Powell refrained from splitting tipper projects.
You see, since the US economy has seen some green growth, expectations of a stimulus reduction have been rising sharply in the market.
There were some pleasant remarks on price pressures, but officials were quick to point out that these were probably temporary factors. The statement also acknowledged progress in the vaccination rollout and said it had boosted economic activity.
However, policymakers reiterated that they would like to see "substantial further progress" before making any adjustments in terms of inflation and employment.
Because of this, Greenback's response was understandable but quiet, as dollar traders were expecting some more interest from the Fed.
USD Pair 15M
Powell to dodge taper talk, but inflation upgrades eyedThe FOMC's announcement comes this week with the latest economic forecast, and many are taking a positive view of the inflation forecast.
Note that the CPI report and the basic PCE price indicator, called the Fed's inflation measure, posted a reversal surprise for May.
However, policymakers may once again warn that price pressures are temporary and cannot be sustained without full employment. Based on past NFP releases, the labor situation is not very good.
In addition, the Fed is likely to be silent on their timeline for terminating pool purchases of assets.
Watch out for dot plot changesMarket watchers may instead turn their attention to the latest predictions of interest rate change dot plots, as some members of the committee may be a little more rude this time around.
In particular, some officials have already adjusted their rate hike forecasts, possibly bringing the average estimate for the first time to early 2023. Combined with the possible rise in inflation, this could be an immediate scenario for a greenback.
On the other hand, the growing emphasis on weak employment data could drive up inflation and raise profit expectations.
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