Today is the big day in markets or we can say the FED day, as the Federal Reserve will declare its interest rate decision, publish its economic projections and finally a press conference in which the FED chair Janet Yellen will speak to the public and respond to questions.
The FED is expected to increase the federal funds rate by 25 basis points after the three hikes that the bank made in December 2015, December 2016 and in March this year, however markets are waiting the projections of the possible rate hikes during the rest of the year and according to this projections or scenarios the market will react and confirm its trend.
Furthermore, before the storm of the FED today, the U.S dollar fell against the Canadian dollar reaching a two month low after the hawkish comments from Bank of Canada Governor Stephen Poloz, Mr. Poloz gave an indication of possible rate hike sooner than expected.
Moreover, the euro advanced again the dollar by 0.044 percent to trade at $1.1205, those gains came after lowering the probability of breaking down the European Union after the critical victory of Emmanuel Macron in the French elections.
The GBP/USD rebounded on Tuesday recording some gains due to some predictions of higher inflation, however the sterling is still under pressure after the surprising results of the general elections last week, furthermore the BOE is not expected to change its policy in the upcoming meeting which will be held tomorrow.
Finally, U.S inflation and retail sales numbers will be out today, however the numbers are not expected to make a major impact on the markets as investors will keep tracing the FED policy meetings and the FED Chair Janet Yellen press conference.
Market events to watch today:
15:30 am USD CPI m/m
15:30 am USD Core CPI m/m
15:30 am USD Core Retail Sales m/m
15:30 am USD Retail Sales m/m
17:30 am USD Crude Oil Inventories
21:00 pm USD FOMC Economic Projections
21:00 pm USD FOMC Statement
21:00 pm USD Federal Funds Rate
21:30 pm USD FOMC Press Conference
*All times GMT.
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