As widely anticipated, the Federal Open Market Committee (FOMC) lifted the funds rate by 0.25% to 1.00% yesterday. The decision was in line with consensus forecasts and the highest Fed Funds rate since October 2008. There was a 9-1 vote to raise rates with Minneapolis Fed President Kashkari dissenting from the decision. In the statement, the FOMC commented that the near-term risks to the economic outlook appear roughly balanced and three more interest rate hikes are still penciled in for 2017. The committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. In conclusion, the long-awaited rate hike came in line with the consensus and we can still expect more interest rate hikes if economic conditions remain stable.
Let’s now take a look at the U.S. Dollar index technical picture in the H4 time frame. The broad dollar’s decline followed the announcement. It might indicate, that the market discounted the news and large market participants were closing their positions on the news. The sequence of the higher highs and higher lows which are typical for an uptrend has been terminated as the index dropped to 100.40 during the news release. Nevertheless, thanks to the high possibility of more interest rate hikes (June 2017 and December 2017 in my opinion), the underlying trend might be still considered bullish and higher price levels are still being anticipated.
The material has been provided by InstaForex Company – www.instaforex.com Source: Instaforex.com
Global macro overview for 16/03/2017:
As widely anticipated, the Federal Open Market Committee (FOMC) lifted the funds rate by 0.25% to 1.00% yesterday. The decision was in line with consensus forecasts and the highest Fed Funds rate since October 2008. There was a 9-1 vote to raise rates with Minneapolis Fed President Kashkari dissenting from the decision. In the statement, the FOMC commented that the near-term risks to the economic outlook appear roughly balanced and three more interest rate hikes are still penciled in for 2017. The committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. In conclusion, the long-awaited rate hike came in line with the consensus and we can still expect more interest rate hikes if economic conditions remain stable.
Let’s now take a look at the U.S. Dollar index technical picture in the H4 time frame. The broad dollar’s decline followed the announcement. It might indicate, that the market discounted the news and large market participants were closing their positions on the news. The sequence of the higher highs and higher lows which are typical for an uptrend has been terminated as the index dropped to 100.40 during the news release. Nevertheless, thanks to the high possibility of more interest rate hikes (June 2017 and December 2017 in my opinion), the underlying trend might be still considered bullish and higher price levels are still being anticipated.
The material has been provided by InstaForex Company – www.instaforex.com
Source: Instaforex.com
Related Posts: