The Market Sees FOMC As Hawkish, The USD Uptrend Begins - Forex News by FX Leaders

The Market Sees FOMC As Hawkish, The USD Uptrend Begins

Posted Wednesday, May 3, 2017 by
Skerdian Meta • 1 min read

The FOMC statement is out and the financial markets have already begun to digest it. There was no press conference from chairwoman Yellen, as we mentioned in the previous market update.

There were a few slightly hawkish and slightly dovish remarks that ended up balancing each other out in my opinion, but the market has taken them as hawkish.

The downsides were that economic growth has slowed and consumer prices declined in March, but consumption remained solid and employment strengthened further, with the unemployment rate declining a few points.

So, the statement is more or less the same as the last one. But, while back in March the market took the statement as dovish and started a USD downtrend, now the market seems to have taken it as hawkish.

I mentioned in the previous update that if the FOMC statement was dovish an uptrend would begin for the USD. Although the statement was nearly unchanged the market thinks it was hawkish. The market is probably relieved that the statement wasn’t dovish. Yet, for whatever reason, the USD is loving it and has been rallying against most major currencies.

Probabilities for a hike in June are interestingly high 

Rate hike odds for June have jumped as well, from 69.6% to around 93%. That´s a huge jump for no change in the rhetoric. We have a long-term sell forex signal in EUR/USD and it´s going in the right direction now.

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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