All Eyes on FOMC Meeting

All Eyes on FOMC Meeting

Markets await Fed's interest-rate decision; however, it could leave interest rates unchanged as the U.S. economy grew by less than expected in the first quarter of the year.  Meanwhile, the anticipations for next month's interest rate adjustment remain in place as the Federal Reserve tightens its monetary policy.

  • The U.S. dollar index (DXY), which measures the greenback against a basket of currencies, extended losses yesterday and settled at 98.60, in anticipation Fed's interest-rate decision.

Despite weak USD, the Greenback settled at ¥112 vs. Japanese Yen as traders shifted to risk appetite as the decline in tensions over North Korea kept the safe-haven Japanese currency undesirable. The U.S. dollar awaits Nonfarm Payrolls data.

Euro climbed to $1.0930 vs. USD as Greece and its foreign creditors reached a deal on a package of bailout-mandated reforms, according Greek finance minister Euclid Tsakalotos. He also said, "The negotiations for a technical deal were concluded on all issues... the way has now been paved for debt relief talks." Technically, the common currency could hit $1.10 in anticipation of Fed. Reserve rate decision.

Gold settled at their lowest level in three weeks as traders went to risk appetite and as US yields rose.  Technically, the yellow metal could settle at $1,250 in anticipation of Fed. Reserve rate decision.

Oil prices declined materially yesterday and fell to their lowest level in over five months. U.S. crude fell to $47 before settling above $48.

The most important economic events:

  • USD Federal Open Market Committee Rate Decision (MAY 03): (GMT 18:00) – Important – Forecast (1.00%) – Previous (1.00%).
  • USD FOMC Rate Decision (Lower Bound) (MAY 03): (GMT 18:00) – Important – Forecast (0.75%) – Previous (0.75%).

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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