USD Index continues to decline under 102.00 on FOMC. The Fed is expected to raise rates by 25 basis points.
USD Index key points of impact
As the index continues to decrease, it tests again at 101.70.
The Fed is projected to raise rates by 25 basis points.
The next item of significance is the ADP report, followed by the ISM Services PMI.
The USD Index continues the recent break of the 102.00 support on Wednesday and adds to Tuesday’s declines.
Indicator USD currently focuses on FOMC
The index declines for the second straight session, extending Tuesday’s rejection from multi-day peaks near 102.40. Due to improving complicated risk mood and sticky market caution before the FOMC event.
Regarding the latter, it is usually thought that the Fed will increase the Fed Funds Target Range (FFTR) by 25 bps to 5.00%-5.-25%. Yet, attention has turned to Chief Powell’s routine presser, where the rate path’s future moves will take center stage.
What to watch out for about USD
Prior to the important FOMC meeting scheduled for later in the NA period, The index corrected downward from recent peaks around 102.40.
Focusing on the bigger picture, the index is still moving through as the Fed is expected to raise rates again in May. Investors are becoming increasingly apprehensive about the Fed’s probable decision-making in the coming months.
The Fed’s continued disinflation is an emerging weakness in several important basics. While at the same time feeding the fear of a likely recession, argues for a break in its raising cycle after the May event.
Important problems with the rear burner:
the ongoing discussion on a gentle or harsh landing for the US economy. Speculation of rate decreases in 2024 contrasts the terminal interest rate at its peak. Fed’s reversal. Political bubbling in relation to China and Russia. US-China trade dispute.
Applicable USD Index levels
Currently, down 0.20 percent at 101.72, the index has immediate support at 101.01 (the weekly bottom from April 26). Followed by 100.78 (the 2023 turf from April 14). And finally 100.00 (the psychological stage). However, a breach beyond 102.80 (the week’s top place on April 10) would allow for further gains to 103.05 (the monthly peak put on April 3). And finally, 103.13 (the 100-day SMA).
