Before Fed’s Decision, the Dollar Falls
The US Dollar (USD) is down today ahead of the Federal reserve’s interest rate decision.
In a contest against both the Japanese Yen (JPY) and the Euro (EURO), the dollar is losing, and that news comes just before the rate decision is made public. This show some market wavering ahead of the decision, especially since the dollar has been going strong against both of those currencies recently.
The story over the last week was that the dollar is holding up well against its competition, but that changed today with a dip in the rate. The Federal Reserve is expected to keep the rates the same during today’s announcement. That should help the dollar hold steady for a while longer and even allow it to improve.
Because there is some fear about what the Federal Reserve will say, though, the price has dropped slightly. Investors are worried that their assets will diminish and the dollar will weaken by this afternoon.
If the Federal Reserve decides that there might be a rate cut but don’t make a definitive statement, that could hurt the dollar as well. The dollar will start moving before any cuts happen, and we should expect to see some change after the Federal Reserve gives its verdict.
Factors Affecting the Dollar’s Performance
While the dollar index has been down recently, it is expected to gain overall for the month, perhaps as much as 1.60%. The dollar is also being affected by employment numbers. A report from ADP National Employment showed that there were 107,000 more private jobs in December than in November. That’s positive news for the dollar, but it is not as good as economists expected (closer to 150,000).
Against the yen, the dollar dropped 0.71%. Up against the Euro, we saw a drop today from 0.924 to 0.919 Euros. These numbers do not suggest a major decline and any great loss of faith in the dollar, but they do show market uncertainty.
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