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
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/TnL91f7sl7
  • Human error in the forex market is common and often leads to familiar trading mistakes. These trading mistakes crop up particularly with novice traders on a regular basis. Learn about the top ten trading mistakes and how you can avoid them here: https://t.co/i8E2AXtzF3 https://t.co/cDcjl3Ue09
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/KWOX5wSipe
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/cwSWCpKtaj
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sZLTs https://t.co/zu5hMovbz6
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/QMKyTBOKNG
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/aRkGoNvj6D
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/ltVTNO2sjT
  • GBP/USD clears the May low (1.3801) as the Federal Reserve forecasts two rate hikes for 2023. Get your $GBP market update from @DavidJSong here:https://t.co/WdTG2niAKz https://t.co/2j02VyH0wm
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.01% 🇪🇺EUR: -0.36% 🇨🇭CHF: -0.60% 🇨🇦CAD: -0.91% 🇦🇺AUD: -0.96% 🇳🇿NZD: -1.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/HWVSmqaiYF
FOMC Hikes Rates by 25-bps Meeting Expectations, Sends US Dollar Lower

FOMC Hikes Rates by 25-bps Meeting Expectations, Sends US Dollar Lower

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- FOMC raises benchmark interest rate to range of 0.75-1.00%, as was expected by markets (Fed funds futures were pricing in a 100% chance pre-meeting).

- Fed interest rate glide path remains unchanged from December 2016 (last update); today’s decision can be thus referred to as a ‘dovish hike.’

- US Dollar sinks across the board without new hawkish guidance; USD/JPY slips under 114.00, EUR/USD challenges 1.0700.

The Federal Open Market Committee surprised absolutely no one today when they announced they would hike the main overnight benchmark rate into a range of 0.75-1.00%, as was priced into the market well in advance of today’s policy meeting. After a series of hawkish commentary from Fed officials in late-February and early-March, coupled with another strong US labor market, today’s rate hike was all but guaranteed.

If anything was going to drive the US Dollar higher today, it would have been an upgrade to their expectations for further rate hikes. However, none materialized: like in December, the FOMC still believes that there will be a total of three rate hikes in 2017. For the greenback, three rate hikes were already priced into the market as of this morning.

Commentary from the initial FOMC statement suggests that policymakers are only cautiously optimistic on the US economy. Describing inflation as “close to the goal” of +2% over the medium-term, policymakers cautioned that the target is “symmetric.” The FOMC believes that inflation is expected to stabilize around +2%, and rates will evolve to ensure that there is a “sustained return to +2% inflation.”

Overall, the FOMC saw the median Fed funds rate at 1.4% at the end of 2017, as they did in December; and the median Fed funds rate at 2.1% at the end of 2018, as they did in December as well. In sum, today’s actions can be regarded as a ‘dovish hike,’ as my colleague James Stanley put it: yes, rates moved higher; but no new hawkish guidance was issued.

Here are the Fed’s new forecasts:

FOMC Hikes Rates by 25-bps Meeting Expectations, Sends US Dollar LowerFOMC Hikes Rates by 25-bps Meeting Expectations, Sends US Dollar Lower

Here is the Fed’s new dot plot:

FOMC Hikes Rates by 25-bps Meeting Expectations, Sends US Dollar Lower

See the DailyFX economic calendar for Wednesday, March 15, 2017

Chart 1: DXY Index 1-minute Chart (March 15, 2017 Intraday)

FOMC Hikes Rates by 25-bps Meeting Expectations, Sends US Dollar Lower

Immediately following the data, the US Dollar slipped back versus the Euro and the Japanese Yen, with the Dollar Index (DXY) falling from 101.54 ahead of the FOMC decision to as low as 100.97. DXY Index was trading at 101.02 at the time this report was written.

Fed Chair Janet Yellen begins speak at 14:30 EDT/18:30 GMT; her Q&A should prove equally market moving as the initial statement release. Follow the commentary in the DailyFX Real Time News feed.

Read more: Preview for March FOMC Rate Decision and Impact on US Dollar

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

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

DISCLOSURES