Tuesday saw a weaker US dollar after consumer confidence slipped lower than forecast. The pound pushed higher to the $1.25 level while EURUSD edged ever closer to the $1.09 handle. US stock markets gave back some gains even though European markets were a little more positive.
The highlight of today’s trading session will be the latest announcement from the Federal Reserve’s Open Market Committee, who will provide a policy statement at 7 pm, followed by a press conference with Chairman Powell at 7.30 pm. The statement will include projections and analysis on their expectations for future economic activity. These will all be based around their dual mandate of stable prices and full employment.
The press conference will feature a statement from Jerome Powell followed by questions from the financial media. They will probe him for answers on some of the basic questions around the impact of the virus. Subjects that will be focused on will likely include: how long will interest rates remain at current levels? How deep will the economic contraction be? Lastly, what other tools does the Fed have if things get even worse? The US dollar will take its cues from the chairman’s responses. In such a situation we could see either a stronger or weaker buck.
Written by Viv Savani. 8:48am, April 29th 2020
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