US session beginning, the US Dollar goes red.

The US Dollar Index is under pressure around 105, with a break to the negative expected. With US Federal Reserve (Fed) Chairman Jerome Powell hitting the stage on Wednesday. The US Dollar (USD) is poised to have a highly binary outcome.

Traders are waiting to hear from US Federal Reserve Chairman Jerome Powell.

Although no increases are projected, the stakes are quite high. Not only did recent data reveal an increase in economic activity. With the job market remaining solid in the United States, but inflationary pressures are also gaining traction.

As if Powell’s current position isn’t difficult enough. The energy sector is putting pressure on inflation. The energy industry is a corner of the inflation basket over. Which the Fed has no authority, save by precipitating a recession, which would destroy any new corporate demand for energy. Following the atrocious performance of European Central Bank (ECB) Chairman Christine Lagarde last week. Investors will want to see if the Fed is in a better position to provide a hawkish pause.

Daily summary: In any case, the US dollar.

Since last week, the US Mortgage Application Index has increased by 5.4%.

In Asian trade, the Thai Baht falls 1% versus the US dollar.

Markets are expected to fall during the European session and until 18:00 GMT. The Fed’swill first announce its interest rate decision. Which is projected to stay at 5.5%. At the time of the rate communication, a joint statement will also be available.

The dot-plot (Phillips curve) will also be presented in the brief. Every Fed member who voted at the September meeting gets to predict where interest rates will be in the following months and years. This manner, a consensus may be reached on how far the Fed believes it has to go and how long rates will remain steady.

Thirty minutes later, at 18:30 GMT, Jerome Powell will take the stage and explain why the Fed raised or paused interest rates. This is the critical point. If Powell is able to convey to the markets the expected hawkish message that the Fed will not cease in its efforts to control inflation.

Equities are down again on Wednesday.

Equities are down again on Wednesday, as there is no way out of the dismal mood that the markets are in this week. At the present, the Hang Seng Index and the Shanghai CSI 300 index are both down year to far, wiping out any gains for the rest of 2023.

According to the CME Group FedWatch Tool, markets are pricing in a 99% likelihood that the Federal Reserve will hold interest rates steady at its September meeting. US Dollar Traders should keep an eye out for any hawkish rhetoric from Powell, given inflation has lately increased.

The benchmark US Treasury 10-year noteThe yield is at 4.36% and reached a high on Tuesday. Yields are rising again after a flight to safety caused bond prices to rise before.