• 1 hour Bernie Sanders Proposes $1.6 Trillion In Student Loan Forgiveness
  • 3 hours Using Chrome? You May Be Sacrificing Your Privacy
  • 19 hours What Would You Do If You Found A Wallet On The Street?
  • 1 day Tesla's Solar Business Faces An Uphill Battle
  • 2 days Billionaires Are Pushing Art To New Limits
  • 2 days Gold Enters A New Bull Market
  • 3 days Why Central Banks Are Dumping The Dollar
  • 4 days Investors Are Spooked As Negative Bond Yields Hit $12 Trillion
  • 4 days US Consumer Debt Is Worse Than Ever
  • 4 days Tariffs Jeopardize $1 Trillion In Energy Investments
  • 4 days Smart Money Is Betting Big On Gold
  • 5 days The World’s $100-Billion-Club Now Has Three Members
  • 5 days How Did 7 Million Tons Of Venezuelan Gold End Up In Africa?
  • 5 days Americans Are On A Crash-Course With Credit Card Debt
  • 5 days The Mining Industry Is Staging A Comeback
  • 6 days Opioid Producers Face Bankruptcy As Federal Crackdown Accelerates
  • 6 days U.S. Sanctions Are Wreaking Havoc On Iran's Economy
  • 6 days Billionaire Hedge Fund Legend Bets Big On Gold
  • 6 days Will Facebook’s Crypto ‘Libra’ Challenge Bitcoin?
  • 7 days Will The Stock Market Really Crash If Trump Isn’t Re-Elected?
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Elliottwave-Forecast

Elliottwave-Forecast

Elliottwave-Forecast

Elliottwave-Forecast.com (by EME PROCESSING AND CONSULTING LLC) was founded in 2005 by Eric Morera. Since inception our company has provided tailored Financial Market Services to…

Contact Author

  1. Home
  2. Markets
  3. Other

US Dollar Outlook into FOMC on March 16

When the Fed raised the rate last year, the minutes suggest that they were relatively hawkish and expected 4 more rate hikes in 2016, as December Fed's dot plot shows. Subsequent events after the December meeting however have seen oil, commodities, and indices selling off sharply, giving pressure to the headline inflation rate.

Central banks around the world have responded by loosening their monetary policy further. Last week ECB expanded the asset purchase to €80 billion / month and cut the deposit rate further to -0.4%. Earlier in the year, BOJ has also stunned the market by cutting the deposit rate to - 0.1%. During this normalization period, the Fed is likely to stay put today. According to CME interest rate futures market, the probability of a rate hike in today's FOMC meeting is less than 5%, suggesting that investors expect the Fed to keep the same rate.

A more interesting thing to look at today's meeting is the Fed's forward guidance and also the new dot plot. There's a possibility that the Fed may tone down their hawkish outlook to calm down market participants and lower the forecast for the median federal funds rate. If this happens, it may trigger U.S. Dollar selloff as market is pricing a more gradual rate hike. The Fed likely would defer the interest rate hike to June or later in the year, and may opt to hike at a slower rate. The interest rate futures market as of March 16 is pricing in an 82% probability of at least one rate hike in 2016.

US Dollar Short-term Elliott Wave Chart
Larger Image

Technically, USD Index is trading in the bearish channel from last December. The Index is retesting the top of the channel on March 10 and got a strong rejection lower, which may reflect downside pressure.

 


For further information on how to find inflection areas to trade $EURUSD, USD Index, Indices and other USD pairs using Elliottwave and our unique trading method of 3-7-11, sign in today for the limited time only FREE 14 Day Trial to see our Hourly, 4 Hour, Daily and Weekly Technical Analysis.

 

Back to homepage

Leave a comment

Leave a comment