U.S. Dollar Higher Ahead Of Fed Announcement
13 Juin 2018 - 6:21AM
RTTF2
The U.S. dollar gained ground against its major counterparts on
Wednesday, ahead of the Federal Reserve's interest rate
announcement, which is widely expected to unveil a rate hike for
the second time this year.
The Federal Reserve is expected to raise its benchmark rate by
25 basis points when it ends a two-day policy meeting later in the
day.
With the hike, the federal funds rate is expected to be in a
range of 1.75 percent to 2 percent.
The language in the policy statement along with an updated set
of economic forecasts from Fed officials, covering GDP, inflation
and unemployment may shed light on how many additional rate hikes
might come out of the U.S. this year.
Apart from the Fed decision, U.S. producer price index for May
will be released at 8:30 am ET. The producer price index is
forecast to rise 0.3 percent on month in May, up from the previous
month's 0.1 percent rate.
On Thursday, the European Central Bank may signal that it is
getting closer to winding down its QE program.
The Bank of Japan is expected to make no changes to its monetary
policy settings when it ends a two-day review on Friday.
The greenback advanced to a 3-week high of 110.69 against the
yen and held steady thereafter. At yesterday's close, the pair was
worth 110.36.
The greenback climbed to 5-day highs of 1.1730 against the euro
and 1.3037 versus the loonie, from its early lows of 1.1753 and
1.3011, respectively. On the upside, 1.16 and 1.32 are possibly
seen as the next resistance levels for the greenback against the
euro and the loonie, respectively.
Reversing from its early lows of 1.3375 against the pound and
0.9866 against the franc, the greenback advanced to 1.3353 and
0.9882, respectively. If the greenback rises further, it may find
resistance around 1.32 against the pound and 1.01 against the
franc.
Looking ahead, U.K. house price index for April, CPI and PPI for
May and Eurozone industrial production for April and employment for
the first quarter are due in the European session.
In the New York session, U.S. PPI for May is scheduled for
release.
At 2:00 pm ET, the Fed announces its decision on interest rates.
The Fed is widely expected to raise the federal funds rate by a
quarter point to a range of 1.75 percent to 2 percent.
US Dollar vs Yen (FX:USDJPY)
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US Dollar vs Yen (FX:USDJPY)
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