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Forex Today: Fed hikes, ECB expected to follow today

Forex Today: Fed hikes, ECB expected to follow today

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 raised its interest rate yesterday by 0.25% to 5.50% as was widely expected. Fed Chair Jerome Powell made clear that any further increase would be “data dependent,” but also said that “we will have to keep policy at restrictive levels for some time.” Markets see this as the latest increase within the tightening cycle, which means that the Fed is seen to have reached the “terminal rate”.

➡️ Stock markets rose, with China's Hang Seng Index rising above 1%, and the US dollar traded lower, following this release.

➡️ The European Central Bank is holding a policy meeting today and is also expected to raise rates by 0.25%, for the ninth consecutive meeting, to a new higher rate of 4.25%.

➡️ The Bank of Japan is holding a policy meeting tomorrow and is expected to leave its negative interest rate unchanged, with the only real uncertainty being its yield cap.

➡️ In the Forex market, long-term trend traders are once again hoping to be Long the EUR/USD currency pair as it begins to rise again in the direction of its long-term uptrend. If the price is established below $ 1.1000, it will question the bullish trend. The strongest major currency today is the Australian dollar, while the US dollar is the weakest.

➡️ Today there will be releases of important data on US advance GDP and unemployment claims data. GDP is expected to decline from an annualized increase of 2% to 1.8%.

➡️ Energies are continuing to rise, with ETI crude oil futures hitting again yesterday near a new 3-month high, on evidence of supply shortages. This may be of interest to trend traders.

 

Credit by DailyForex.com

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