USD Recovers and Markets Await the FOMC Meeting

USD

The U.S. dollar recovered following last week’s trading session with traders accepting the testimony of former FBI Director James Comey. The Greenback declined to its lowest levels in 7- months vs. a basket of major currencies due to the UK election and James Comey’s testimony.

• The U.S. dollar index (DXY), which measures the greenback against a basket of currencies, settled at 97.20, in anticipation of the Fed's decision.

All eyes will be on the Federal Reserve on Wednesday with expectations to hike the range of the fed funds target rate by a quarter point.

GBP

The British Pound suffered heavy losses and declined sharply following the UK elections, as Conservative party failed to reach a majority in the British Parliament, with 314 seats, 17 less than their current number. Cable could trade under pressure during the next period amid political uncertainty.  Technically, GBP could further decline in anticipation of the BOE’s interest rate decision and Inflation Report.

Gold

Gold prices declined at the end of last week’s trading session and settled below $1,270 vs. USD, negatively affected by a strong USD.

Oil

Oil prices settled at the end of last week’s trading session. Meanwhile, U.S. crude declined for the third week in a row, as the market weighed a relentless raise in U.S. drilling against ongoing efforts by OPEC to reduce a global glut.

The most important economic events:

• USD Monthly Budget Statement (MAY): (GMT 18:00) – Medium – Forecast (-$87.0b) – Previous (-$52.5b).

Disclaimer
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.