Good day forex traders.
As the markets await the expected interest rate hike by the US Federal Reserve, we note that the US dollar is picking up. Interest rates often exert a certain amount of influence on the underlying currency. Hence it is prudent to understand it to supplement our trading research.
BBC reports ” Federal Reserve officials are widely expected to announce an interest-rate increase this week amid buoyancy in the stock market and indications the U.S. economy continues to grow steadily, without signaling they anticipate accelerating their pace of policy tightening.
Beyond the expected announcement Wednesday of a quarter-point hike in the U.S. central bank’s benchmark rate target, to a range of 0.75 percent to 1 percent, investors will be looking for whether policy makers change their forecasts for the rest of 2017 and beyond.
Fed Chair Janet Yellen may offer additional clues during a press conference in Washington 30 minutes after the 2 p.m. release of a post-meeting statement and new projections. ”
As the markets have pretty much priced in the interest rate hike, attention will probably be more on the meeting minutes with regards to the future pace of increase. Any deviation from expected norms may induce a knee jerk reaction.