The US Dollar is trading in largely favorable ranges this morning, for its first gain in five days, ahead of this afternoon’s monetary policy decision by the Federal Reserve.
It is widely expected that the Fed will make no move this afternoon, instead electing to hold interest rates steady at 3.75%. While there is an approximately 2.8% percent of a cut today, most Traders are anticipating that the first cut of the year will not come until June.
In other Fed related news, Rick Rieder is emerging as the most likely candidate to succeed Jerome Powell as Chair of the Federal Reserve, with Kevin Warsh in a distant second place. Rick Rieder is currently BlackRock’s Chief Investment Officer of Global Fixed Income and given that he championed a more aggressive 50 bps cut late last year, it is a fair assumption that he would similarly advocate for more dovish monetary policy should he secure the Chair position.
What to Watch This Week…
- Monex USA Online is always open
EUR ⇓
The Euro is down against the Buck this morning following the largest single day move since COVID yesterday. The Euro currently sits at its strongest level since mid-2021. The European Central Bank is keeping a close eye on how an appreciating Euro will affect inflation and will consider that impact in their data driven approach to future policy decisions. As a result of the move, the probability of a mid-year interest rate cut by the ECB has doubled.
