The US dollar is stronger before the Federal Reserve meeting, as the forecast of DOT conspiracy will be essential
- The US dollar is trading stronger, with a significant increase against the Turkish lira.
- Traders are trying to determine the impact of the upcoming federal reserve price decision on Wednesday.
- The US dollar index is still stuck between 103.00 and 104.00 today.
The US dollar index (DXY), which tracks the performance of the US dollar (USD) for six main currencies, up to 103.67 at the time of writing this report on Wednesday. The increase in Greenback came on the back of the highly declining pop music, which exceeds 5 % in the dollar against the Turkish lira (attempt) after the headlines appeared in which the authorities were detained by the mayor of Istanbul Ikrim Imamoglu, and President Tayeb Erdogan, her political political rival, on charges of spoiling and terrorist.
At the forefront of economic data, it is a very quiet day in education towards the Federal Reserve Decision (Fed) on interest rates later in the day. The FOOC Open Market Committee (FOMC) is scheduled to announce a policy price decision and publish a summary of economic expectations (SEP). After the meeting, Federal Reserve Chairman Jerome Powell will comment at a press conference. With Trump’s policy in the background, the markets will want to know the number of interest, if any, on the discounts of members of the Federal Reserve in 2025 and beyond.
Daily Digest Market Mows: phone calls lead to nothing
- On Wednesday, the US President Donald Trump made a phone call to Ukraine President Voludmir Zelinski. The phone call comes just one day after US President Donald Trump made a phone call with Russian President Vladimir Putin. Although the markets hope to stop the truce of the shooting or even a peace agreement, the result of this initial phone call was very dark with a wide list of demands.
- At 18:00 GMT, the Federal Reserve will issue a interest rate decision and a statement of monetary policy, along with a summary of economic expectations.
- The policy rate is expected to remain unchanged in the range of 4.25 % -4.50 %.
- Besides, the interest rate expectations in the SEP update may indicate the number of prices expected by the Federal Reserve for 2025 and 2026.
- At 18:30 GMT, Federal Reserve Chairman Jerome Powell will present a statement and receive questions at a press conference.
- The shares are divided into the American trading session, as stocks advance in the United States during the decline of European stocks.
- According to the CME Fedwatch tool, the possibility that interest rates will be lower than current levels in May currently reach 16.8 %, compared to 21.5 % on Tuesday. For the month of June, borrowing costs are 62.6 % lower.
- The return in the United States is traded for 10 years about 4.31 % and very stable a day, off the lowest approximate level for five months at 4.10 % on March 4.
Technical analysis of the US dollar index: Fed’s Powell keeps the key
The US dollar index (DXY) coincides with other pressure on its support level on the negative side near 103.18 on Tuesday. The fact that support can refrain from DXY to hit the lowest new level for six months indicating that the markets are waiting for more clarity on the definitions, the American economy, inflation and political policy. DXY is located at a crossroads where, as soon as the level of 103.18 is broken, it may not return for a long time now after many banks have started calling for further the value of the US dollar in the coming years, according to Bloomberg.
Returning to 104.00 means that DXY remains simply loyal to its scope for the month of March. If the bulls can avoid technical rejection there, look for a large racing towards a circular level of 105.00, with a simple moving average convergence for 200 days (SMA) at that point and enhances this area as a strong resistance. Once it is broken in that area, it will present a series of axial levels, such as 105.53 and 105.89, as covers.
On the negative side, the round level of 103.00 can be considered declining in the event of the outbreak of revenues in the United States on the back of the federal reserve connection later on Wednesday, with up to 101.90 cannot be conceived if the markets are surrendered to their long -term property.
US dollar index: daily chart
Common questions scheme points
“DOT” is the popular name for the interest rate expectations by the Federal Open Market Committee (FOMC) for the Federal Federal Reserve (Fed), which implements monetary policy. It is published in the summary of economic expectations, a report in which FOMC members also issue their individual expectations for economic growth, unemployment and inflation rate for the current year and the next few. The document consists of a planning plan for interest rate expectations, with the expectations of each member of FOMC represented by a point. The Federal Reserve also adds a schedule that summarizes the scope of expectations and the mediator for each indicator. This makes it easy for market participants to know how political makers expect the US economy to perform in the short, medium and long term.
The American Federal Reserve publishes a “DOT plot” once in each other meeting, or in four of the eight scheduled annual meetings. The summary of the economic expectations report is published in addition to the monetary policy decision.
The “DOT plot” gives a comprehensive view of Federal Reserve Policy Manufacturers’ expectations. Since expectations reflect the dropping of every interest rate official at the end of each year, it is a major indication of aspiration. By looking at a “point plot” and comparing data to the current interest rate levels, the market participants can know where political makers expect prices to turn to the general trend of monetary policy. With the issuance of expectations every three months, the “DOT plot” is widely used as a guide to know the average station and the potential time of the policy axis.
The most moving data on the market in the “DOT plot” is to drop the federal funds. Any change compared to previous forecasts is likely to affect the US dollar evaluation (USD). In general, if the “DOT plot” shows that policy makers expect interest rates in the short term, then this tends to be bullish of the US dollar. Likewise, if the projections indicate a decrease in the coming prices, the dollar is likely to weaken.
