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US Dollar (DXY) Remains Supported Ahead of Significant FOMC Meeting

US Dollar (DXY) Remains Supported Ahead of Significant FOMC Meeting

Nick Cawley, Senior Strategist
What's on this page

US Dollar Price, Chart, and Analysis

  • Fed set to announce $30 billion bond tapering on Wednesday.
  • Dot plot will reveal board members’ views on interest rates.

The latest FOMC meeting – December 14/15 – is expected to show the Federal Reserve reducing its bond-buying program by $30 billion a month, from a current $15 billion reduction, as the US central bank continues to tighten monetary policy in the face of runaway domestic inflation. Last Friday’s inflation report showed headline inflation in the US running at an annual rate of 6.8%, a near 40-year high, driven by a large increase in food, fuel, car, and housing prices. This week’s Fed meeting will also see the publication of the latest Summary of Economic Projections including the latest dot plot, a visualization of the central banks’ view on the path of US interest rates. With two 0.25% rate hikes already priced in the market, signs of a third hike could bolster the US dollar further.

Weekly Fundamental US Stocks Forecast: Will Fed Increase QE Taper?

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The daily US Dollar (DXY) chart following trend support higher. This support, previously resistance, has held multiple attempts over the last few days and could see the greenback test the 96.58/60 level in the near future. A confirmed break above here will leave the November 24 multi-month high at 96.88 vulnerable.

US Dollar (DXY) Daily Price Chart December 13, 2021

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What is your view on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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