FOMC

Wednesday was a day of divergent policies that saw the Bank of Japan (BOJ) hike rates more than expected and the Fed signal a cut. And that saw the US dollar and yen broadly move their separate ways.

Bond traders are stepping back into the market on bets that the Fed will deliver a dovish hold today, which weighed on the US dollar and supported gold, silver and copper ahead of today’s FOMC meeting.

The US Dollar Index (DXY) is testing the critical 104.50 level – today’s close will be key.

Crude Oil Forecast: Oil’s track to 74 was halted by positive US GDP and declining inventories. What’s next for FOMC and NFP Week?

USDJPY Forecast: the anticipation of a tighter monetary policy at the next BOJ meeting has dominated oversold pressures on the USDJPY. Is there a reversal on the horizon?

Harris replacing Biden may not be a radical overhaul where policies are concerned, but it has certainly brought the Democrat’s prospects for maintaining power back from the brink of death. From a market perspective, it means Trump is no longer a ‘walk in’ President, and political headlines from the US are no longer driving sentiment for now. Thankfully, we have intertest rate decisions from the FOMC, BOE and BOJ to drive sentiment, along with NFP and Australia’s CPI report for good measure.

Nasdaq Outlook: The latest monetary policies reversed the euphoric market trends, but not for Nasdaq

EURUSD Forecast: A drop in CPI results put the EURUSD back above key level 1.0820. What’s next for FOMC?

WTI Crude Oil takes a dive as market anticipations steer the wheel towards lower demand expectations

US dollar traders will be watching Fed Chairman Powell’s press conference and any decisions about the central bank’s balance sheet runoff as potential market-movers for the US Dollar Index (DXY)

It was a come back type of week for stocks, even with another hot inflation report. But next week brings the Fed and markets are still holding on to hopes for 2024 rate cuts.

US yields dragged the US dollar lower as the Fed continued to favour three cuts this year, helping AUD/USD break back above its 200-day MA ahead of today's employment figures.

Fed Chairman Powell sounded like someone who was looking for an excuse – any excuse – to cut interest rates in his press conference.

Gold has been falling back in the past week and a half after hitting a record high at $2195. The key question is whether today’s FOMC policy decision will cause it to fall back even further, or will it trigger a fresh wave of buying that could propel the precious metal towards a new all-time high.

Will the yen make a comeback with BoJ finally ending negative rates? Attention now turns to FOMC policy decision, with traders expecting the median dot plots to point to 2 rate cuts in 2024 – but is a hawkish Fed already priced in? USD/JPY technical analysis points higher, but do watch out for a potential false breakout.

FOMC meeting risks are skewed toward a less dovish outcome, with the potential for the median Fed dot for 2024 to rise to 4.9%, or only two interest rate cuts for 2024.

It’s going to be a massive week for EUR/USD traders with major central central bank decisions, inflation updates from around the world, flash PMIs to sink your teeth into along with a busy ECB speaking calendar. But in the end, one event will likely override all others: the Federal Reserve’s March FOMC interest rate decision.