The Fed And The Euro
Naeem Aslam | Mar 16, 2021 05:20AM ET
The US stock futures are trading higher ahead of the most important event of this week--the Federal Reserve meeting. Jerome Powell, the Federal Reserve Chairman, has said several times that he is in no rush to increase the interest rate or change the stance on the monetary policy. The last time the Federal Reserve had their meeting was back in December, and at the time the situation was completely different.
The US was facing a new wave of coronavirus, and restrictive measures were being rolled out in order to prevent the country from further damage from coronavirus. However since then, the US economic conditions have improved. We have also seen another stimulus package passing from the House and the Senate. This stimulus relief package is going to hit the US economy very soon. Nearly 100,000,000 stimulus checks will be arriving in the next 10 days, and they are very much likely to boost economic growth.
In addition to this we are also looking at a situation where more than 20% of the population have already received their first jab of COVID-19 vaccine. The restrictive coronavirus measures which were put in place back in December are also being eased off.
Basically we are looking at the situation where there are greater chances of a market tantrum taking place because the Fed is under pressure to change the narrative on its monetary policy. Traders are going to focus on the dot plot which with provide us more detail about the Fed’s future monetary policy.
Overall, we are expecting the dollar index to continue its journey to the upside, and this could be immensely bearish for the currency pairs such as the euro dollar. The currency pair is already under selling pressure, and today and tomorrow we could see more sell off for this pair. The immediate support is at 1.17 while the resistance is at 1.2066.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.