FOMC to be scrutinized closely for lift-off clues – MUFG

FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, suggests that the release of the latest FOMC policy statement will be scrutinized closely to see if it is consistent with market expectations which have pushed back the timing of the first Fed rate hike into next year.

Key Quotes

“The statement is likely to acknowledge that economic and labour market growth has moderated recently which may satisfy market expectations looking for the Fed to delay raising rates. However, it remains unlikely that the Fed will explicitly rule out beginning to raise rates this year leaving the decision data dependent in the coming months.”

“The US dollar may weaken modestly following the release of the statement but it is unlikely to derail its renewed upward momentum. The Fed still appears relatively hawkish when overseas central banks are increasingly shifting to ease monetary policy. The US dollar’s recent rebound is unlikely to overly concern the Fed either as financial conditions have eased significantly since their last meeting in September.”

Lee Hardman, Currency Analyst at MUFG, suggests that the release of the latest FOMC policy statement will be scrutinized closely to see if it is consistent with market expectations which have pushed back the timing of the first Fed rate hike into next year.

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