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Prospect of FOMC meeting on Jan 31st - Here are Bullish & Bearish factors!
Will the Fed Help the USD to Recover?
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Fed Interest Rate Decision and FOMC Statement Wednesday, January 31st, 2018 at 19:00 GMT
Last week, the US dollar reached a new 3-year low against the euro after US Treasury Secretary, Steve Mnuchin, suggested a weak dollar would be good for the US.
Nonetheless, President Donald Trump later said that Mnuchin’s comments were misinterpreted and that he wants to see a strong dollar.
Other Central Banks have spoken against artificial manipulation of exchange rates, but what will happen tomorrow?
Market experts are divided in 2 groups:
- Bullish factors
- A weak dollar favours exports (goods and services) denominated in USD and this further stimulates the US economy.
- The Fed’s dual mandate is almost fulfilled with full employment (4.1% unemployment) and stable low inflation (1.8%).
- Bearish factors
- US President Donald Trump seeks a strong dollar.
- The Eurozone economy is strengthening at a moderate pace and this is pushing the single currency (EUR) up.
What do you think? Will the EUR/USD continue to rise or fall?
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