Market Watch: Markets Await Fed Decision on Interest Rates
After the Bank of Canada and the European Central Bank reduced interest rates by 25 basis points, the markets are now awaiting the reaction of the US Federal Reserve. The Fed is set to announce its decision on interest rates today at 10:00 pm Dubai time. Currently, US interest rates are at their highest level in 23 years, at 5.5%.
Recent job data, which showed an increase to 280K jobs and exceeded expectations, indicates continued inflationary pressures. This suggests that the US economy is not slowing down as the Fed hopes, which is necessary to achieve a continuous decline in inflation towards the target level of 2%.
Today's inflation data, which will be released at 4:30 pm Dubai time, will have a significant impact. It will influence not only the Fed's perspective on interest rates at its meeting but also its outlook on when it might begin a monetary easing policy. This is especially crucial with only four meetings remaining until the end of the current year.
Looking at the expected scenarios, if inflation remains above 3%, the Fed is likely to maintain its current policy and keep interest rates high for a longer period than the markets expect. Conversely, if inflation drops below 3%, we may anticipate a shift in the Fed's tone, potentially leading to an interest rate cut.
From a technical point of view, the dollar is currently trading between the levels 100 and 106.5, breaking or exceeding these levels will determine the path of the dollar.
Recent job data, which showed an increase to 280K jobs and exceeded expectations, indicates continued inflationary pressures. This suggests that the US economy is not slowing down as the Fed hopes, which is necessary to achieve a continuous decline in inflation towards the target level of 2%.
Today's inflation data, which will be released at 4:30 pm Dubai time, will have a significant impact. It will influence not only the Fed's perspective on interest rates at its meeting but also its outlook on when it might begin a monetary easing policy. This is especially crucial with only four meetings remaining until the end of the current year.
Looking at the expected scenarios, if inflation remains above 3%, the Fed is likely to maintain its current policy and keep interest rates high for a longer period than the markets expect. Conversely, if inflation drops below 3%, we may anticipate a shift in the Fed's tone, potentially leading to an interest rate cut.
From a technical point of view, the dollar is currently trading between the levels 100 and 106.5, breaking or exceeding these levels will determine the path of the dollar.
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