![]() It adds “The median dot has displayed a relatively stable spread to the inflation projections in the last three SEPs. UBS expects higher inflation projections which will tend to increase interest rate expectations. Markets will remain on alert for any fresh guidance from the central bank through the Wall Street journal.Īccording to UBS “We do not expect Chair Powell to pre-commit to raising rates in July, but we expect a majority of FOMC participants will assume that more monetary policy tightening is needed in order to restore price stability,” The chances of a rate hike by July are seen at close to 70%. These projections of interest rates are known as the dot plots.Īt this stage, consensus forecasts are for that the Fed will decide to skip a rate hike at this meeting, but futures markets indicate over a 30% chance of a rate hike. The Fed will release a statement to accompany the decision and Chair Powell will also hold a press conference.Īt this meeting, the central bank will also issue its latest set of economic forecasts.Īlongside these forecasts, the latest interest rate projections from individual committee members will also be released. The Federal Reserve will announce its latest interest rate decision on June 14th. Investment banks overall consider that an improved Euro-Zone economic performance will be necessary for the Euro to make significant gains. They add “Weaker industrial production data and falling inflation in the euro-zone does shift the near-term balance of risks more to the downside for EUR/USD but it is most likely we will see consolidation at these levels into the CPI data on Tuesday and then the FOMC on Wednesday and ECB meeting on Thursday.” With two important interest rate decisions due over the next week, however, caution is liable to prevail in the very short term.Īnalysts at MUFG also expect consolidation will continue in the near-term. ![]() Low market volatility has tended to undermine any potential US dollar (USD) support. However, the pair has failed to breach the 1.0800 handle. The Euro (EUR) has been held in tight ranges against the US Dollar (USD), with support above 1.0650, and posted a 2-week best at 1.0785. "EUR/USD could stabilise marginally below 1.0800," she adds. The near-term outlook could see EUR/USD "consolidate around current levels in core dollar pairs, " says Francesco Pesole, FX Strategist at ING. The Euro to Dollar (EUR/USD) exchange rate is seen trading around 1.0747 as markets reopened for the new weekly session.
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