Morning Preview: FOMC Draws Near
Rowan Crosby • 2 min read
The month has wrapped and it was an eventful end to proceedings. Stocks closed out a super strong month and the US dollar found some footing, after a poor start to the week. As the new month begins, expect a bang as we have the FOMC interest rate decision today, which is going to shake things up.
As a result, we can expect the majors to be a little more subdued in Asian trade. The AUD and NZD weakened overnight and there might not be much follow through, given the stakes on offer later.
If we get the result that we are expecting at the Fed announcement, then interest rates won’t be changing. All the experts are predicting December to be the month that the US raises interest rates, so we are on the lookout for any hints to back up that thinking. Should some come out in the accompanying statement, then you can be sure that the USD will be on the rise.
Some good options for trades in the event of a proposed December rise might be the AUD or NZD, given the fact that they have been two of the weaker currencies in recent times. Momentum is strong to the downside, and the price action has been relatively predictable in terms of identifying pullbacks.
As we can see the USD strengthened, however, it hasn’t run up to the highs. If we get word of a potential hike then expect 95.00 to get taken out comfortably.
US Dollar Index (DXY) – 240 min Chart
Key Economic Events
NZD – Employment
CHY – Manufacturing PMI
GBP – Manufacturing PMI
USD – FOMC Statement
EUR – German Unemployment
GBP – BOE Interest Rate Decision
AUD – Retail Sales
USD – Employment