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Fed Rate Decision Starts a Run of Key Data and Perhaps Volatility

Fed Rate Decision Starts a Run of Key Data and Perhaps Volatility

John Kicklighter, Chief Strategist

Talking Points:

• The week's key event risk - and perhaps its volatility - starts in earnest starting today with the FOMC decision

• Though unlikely to change rates forward guidance is a key driver for the Dollar and global risk trends

RBNZ rate decision, UK and US GDP will be event risk to remember after the Fed headlines

See the DailyFX Analysts' 1Q forecasts for the Dollar, Euro, Pound, Equities and Gold as well as our favorite 2016 trading opportunities in the DailyFX Trading Guides page.

Fundamentally, the week truly begins today. The FOMC rate decision is scheduled for release today, and there is clear anticipation in both the US Dollar and global capital markets. While it is unlikely that the central bank changes its policy so soon after December's hike, the market has recognized the importance of forward guidance to setting the expectations for rates going forward. Reinforcing the timing for the next hike could revive the USDollar's stalled run and return key pairs like EURUSD to trend. Just as important, risk trends may find their confidence in complacency further dissolved by the move away from support of the world's largest central bank. We prepare for volatility and trend interpretation with this first key event risk in today's Trading Video.

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

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