Strategy Video: Fed Decision Set to Trigger Dollar, Risk Response
• A broad, dovish shift by many of the largest central banks has leveraged the importance of the Fed's move
• Not only does a divergent hawkish view for the Fed present a Dollar lever, it can change global 'risk'
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In the past few weeks, we have seen policy changes and data that have shifted the global view on monetary policy to a more accommodative / risk-positive course. While the ECB's new QE program, the easing of hawkish commentary from the BoE, surprise BoC rate cut and other changes reinforce a sense of central bank-derived financial stability and economic support; the Fed's complicity remains a vital ingredient to FX trends and the bearings of investor sentiment globally. The upcoming FOMC decision is not one of the quarterly events that offers updated forecasts for labor markets, inflation and interest rates. So, the market's assessment of the situation will be more finely balanced on rhetoric in the accompanying statement. What would a hawkish or dovish outcome look like? How will this event his the Dollar and broader markets? We discuss the FOMC scenarios in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.