Traders eye USD volatility ahead of FOMC minutes
Forex traders will be keeping an eye on the USD today for any volatility with the release of the FOMC minutes tonight.
The Federal Reserve made it clear that they will not lower interest rates until they see a decrease in inflation - and recent CPI data has shown that inflation is not going down as quickly as expected. We could therefore expect some upside on the dollar, as IGTV’s Angela Barnes explains.
(AI Video Summary)
The U.S. dollar
The value of the USD might change a lot soon because of some important reports coming out. Right now, the value of the dollar is not really going up or down, but that could change. The people who control the money in the U.S. have said that they will only lower interest rates if inflation goes down. But it seems like inflation is not going down as quickly as they thought, so the dollar could actually become more valuable.
The stock markets
The people who trade in the stock market are adjusting their predictions about when and if the government will lower interest rates. This has caused the value of the dollar to go up since the beginning of the year. There's a tool that shows the chances of the government lowering interest rates, and right now, the chances are pretty low for the next meeting in March. But the chances go up for the meeting in May, and by the meeting in June, it's almost certain that they will lower rates. These increasing chances of lowering rates could affect how much the dollar is worth.
So, to sum it up, the release of some important reports could make the value of the dollar change a lot. Right now, the value of the dollar is steady, but the government's stance on lowering rates and the slower-than-expected decrease in inflation might make the dollar more valuable. The predictions of the traders have also influenced the value of the dollar in recent months. It's unlikely that they will lower rates in the next meeting, but the chances go up for future meetings and this could affect the worth of the dollar.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
