Markets expect the US Federal Reserve to raise its interest rate later today by 0.25% at the terminal peak of the current tightening cycle.
➡️ The US Federal Reserve will hold a policy meeting later today where it is widely expected to raise its interest rate by 25 basis points to 5.50%. The increase has been well priced and the controversy is whether this will be the last increase within the current cycle: most analysts expect it to be.
➡️ There are a slew of important corporate earnings reports due today and later this week, so the actions are mixed. Anticipating the Fed later today is also causing a lack of price direction.
➡️ Australian CPI (inflation) fell from an annualized rate of 5.6% to 5.4% as expected, but some of the CPI metrics came in lower than expected, giving very little surprise. However, the Australian dollar barely reacted to the news, even though it is the weakest major currency today.
➡️ Energies are seeing a rally, with WTI Crude Oil futures hitting a fresh 3-month high again yesterday, on evidence of supply shortages. This may be of interest to trend traders.
➡️ In the Forex market, the strongest major currency today is the Swiss franc, while the Australian dollar is the weakest. Forex markets may not go higher due to today's FOMC release and expected rate hike, with the US dollar likely to rallywill consolidate in the meantime.
➡️ US CB consumer confidence data released yesterday was slightly better than expected.
➡️ The governor of the Bank of Japan is quoted as saying that the Bank will maintain an accommodative monetary environment.
Credit by DailyForex.com