Dollar Awaits Federal Reserve Policy Decision

USD

On Wednesday, the Greenback traded under renewed selling pressure, falling lower vs. a basket of major currencies ahead of the Federal Reserve’s policy decision. Traders will be focusing their attention on the central bank's policy statement for hints on the monetary policy outlook. Besides the Fed, markets players are awaiting Chicago Purchasing Manager (JAN), which is expected to hit 64 from 67.6.

• The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down by 0.24% at 88.81, falling back towards last week’s low of 88.25, its weakest level since December 2014.

EUR

The single currency gained ground vs. the US dollar and rose by 0.27%, to settle at $1.2436. On the release front, the Euro-Zone Consumer Price Index Core (YoY) (JAN A), which is expected to hit 1.0% from 0.9%.

GBP

The Sterling pound rose by 0.23%, to settle at $1.4178. No major reports are due from the UK today.

JPY

Against the JPY, the USD fell slightly by 0.05%, to settle at ¥108.73.

Gold

Earlier today, Gold prices settled high, as traders are awaiting the outcome of the Federal Reserve's policy meeting, the last of Janet Yellen's tenure as chair, before she hands the chairmanship over to Jerome Powell. Markets expecting policymakers to keep interest rates unchanged. Gold Futures - Feb 18 (GCG8), rose by 0.42%, to settle at $1,341.00

Oil

Also on Wednesday, Oil prices declined for a third day in a row after data from an industry body showed U.S. crude stocks rose more than expected last week. Crude Oil WTI Futures - Mar 18 (CLH8) fell as much as 0.68%, to settle at $64.06, and Brent Oil Brent Oil Futures - Apr 18 (LCOJ8) was down by 0.66% at $68.07.

The most important economic events

• EUR Euro-Zone Consumer Price Index Core (YoY) (JAN A): (GMT 10:00) – Important – Forecast (1.0%) – Previous (0.9%).
• EUR Euro-Zone Consumer Price Index Estimate (YoY) (JAN): (GMT 10:00) – Important – Forecast (1.3%) – Previous (1.4%).
• USD FOMC Rate Decision (Upper Bound) (JAN 31): (GMT 10:00) – Important – Forecast (1.50%) – Previous (1.50%).
• USD FOMC Rate Decision (Lower Bound) (JAN 31): (GMT 10:00) – Important – Forecast (1.25%) – Previous (1.25%).

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.