What’s next? – USDJPY 21.03.18
The dollar was trading 0.05 percent lower vs the Japanese yen at 106.47 as of 04:40 GMT on Wednesday, with the dollar easing as Fed’s monetary event approaches.
The US dollar index, which measures the greenback against six major currencies, was trading 0.10 percent lower at 89.86 by the time of this writing.
The Federal Reserve is expected to raise interest rates for the first time this year by 25 basis points, which would put the benchmark rate in a range between 1.50 and 1.75 percent.
According to Fed funds CME Group’s FedWatch program, market players are currently pricing in a nearly 94 percent chance of a rate hike this week. It would be the first hike of 2018.
Analysts have pointed out Fed’s interest rate hike has already been priced in, explaining a downward correction is likely once the official announcement is done.
However, the dollar could extend gains if Jerome Powell opts for a more hawkish rhetoric. The US regulator has forecasted at least three rate moves for 2018.
No relevant data was released on Tuesday.
Ahead in the day, market players will be paying attention the release of existing home sales for February at 14:00 GMT and the interest rate decision for March as of 18:00 GMT. Investors will also carefully monitor a speech by Fed Chair Jerome Powell.
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