Traders eye USD volatility ahead of FOMC minutes

[MongiIG]

Forex traders will be keeping an eye on the USD today for any volatility with the release of the FOMC minutes tonight.

Written by: Angela Barnes | Financial presenter/producer, London

 

Publication date: Wednesday 21 February 2024 10:30

The Federal Reserve made it clear that they will not lower interest rates until they see a decrease in inflation - and recent CPI data has shown that inflation is not going down as quickly as expected. We could therefore expect some upside on the dollar, as IGTV’s Angela Barnes explains.

 

The U.S. dollar

The value of the USD might change a lot soon because of some important reports coming out. Right now, the value of the dollar is not really going up or down, but that could change. The people who control the money in the U.S. have said that they will only lower interest rates if inflation goes down. But it seems like inflation is not going down as quickly as they thought, so the dollar could actually become more valuable.

The stock markets

The people who trade in the stock market are adjusting their predictions about when and if the government will lower interest rates. This has caused the value of the dollar to go up since the beginning of the year. There's a tool that shows the chances of the government lowering interest rates, and right now, the chances are pretty low for the next meeting in March. But the chances go up for the meeting in May, and by the meeting in June, it's almost certain that they will lower rates. These increasing chances of lowering rates could affect how much the dollar is worth.

So, to sum it up, the release of some important reports could make the value of the dollar change a lot. Right now, the value of the dollar is steady, but the government's stance on lowering rates and the slower-than-expected decrease in inflation might make the dollar more valuable. The predictions of the traders have also influenced the value of the dollar in recent months. It's unlikely that they will lower rates in the next meeting, but the chances go up for future meetings and this could affect the worth of the dollar.

 

 

 

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