Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
US Dollar May Rise vs Euro if FOMC Minutes Cool Fed Rate Cut Bets

US Dollar May Rise vs Euro if FOMC Minutes Cool Fed Rate Cut Bets

Dimitri Zabelin, Analyst

FOMC Meeting Minutes, US Dollar – TALKING POINTS

  • US Dollar may rise vs Euro if FOMC minutes disappoint market expectations
  • Investors have been heavily piling in Fed rate cut bets amid downside risks
  • Recession fears amplifying demand for anti-risk assets like the US Dollar

Learn how to use political-risk analysis in your trading strategy!

The US Dollar may rise at the expense of the Euro and equity markets if the Fed meeting minutes hammer investors’ hopes for aggressive stimulus. As outlined in my US Dollar forecast, the Greenback may continue to gather momentum as a dimming fundamental outlook and growing recession fears place a premium on liquidity above return.

At the most recent FOMC meeting, Fed Chairman Jerome Powell cooled rate cut bets after he said the reduction was not the start of an easing cycle but rather insurance against rising uncertainty. San Francisco Federal Reserve President Mary Daly on Tuesday had a similar message when she said that the 25-basis point cut was delivered to “[continue the] economic expansion” and not due to the perception of an impending downturn.

Markets may be disappointed that their expectations for accommodative monetary policy may be further away than they had hoped. The rift in their forecasts vs reality may result in volatility and uncertainty which will likely end up being tailwinds for anti-risk assets like the US Dollar and the Japanese Yen. However, souring sentiment may then cause cycle-sensitive FX and equities to fall from capital outflow.

CHART OF THE DAY: US Dollar Index May Continue to Climb as Premium for Liquidity Rises

Chart Showing US Dollar

US Dollar chart created using TradingView

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES