EUR/USD. March 17, 2021 | Dollar at 1.19 in anticipation of the results of the Fed meeting
On Wednesday, EUR/USD continues to trade at 1.1900 in anticipation of the results of the US Federal Reserve meeting, which will be announced tonight.
Yesterday's economic statistics put pressure on the dollar. Retail sales in February decreased by 3.0% m/m against the previous growth by 7.6% m/m (revised value). The forecast assumed a decline of only 0.5%. Analysts note that sales have deteriorated amid cold weather in the States this year.
The volume of industrial production in the US in February fell by 2.2% m/m against expectations of growth by 0.4% m/m and the previous rise by 1.1% m/m. This was also the result of an abnormally cold and snowy winter.
Today all traders' attention is focused on the decision of the US Federal Reserve on the rate and further course of monetary policy. The rate is likely to remain at zero, and the main interest is the press conference of the head of the FRS. The tone of J. Powell's comments may become a little more aggressive than before, however, one should not expect signals of a softening of the policy.
The economic calendar for today is practically empty, so trading will be held in a calm manner near the level of 1.19, until the announcement of the results of the Federal Reserve meeting.GBP/USD. March 17, 2021 | Market participants awaiting the results of the US Federal Reserve meeting
The focus of traders this week is the meetings of the US and UK central banks. The US Federal Reserve will announce the results of its meeting tonight: analysts predict that the regulator will leave the current parameters of monetary policy unchanged, while raising the assessment of economic growth, as well as, possibly, inflation.
Based on the results of the December meeting, the leaders of the FRS predicted that the target inflation rate of 2% would be achieved no earlier than 2023. However, now the regulator may revise its forecasts towards accelerating inflation, given the recent macroeconomic data. And this will undoubtedly be a positive factor for the US dollar.
As for the Bank of England, which will meet on Thursday, economists believe that the Central Bank will continue to take a wait-and-see attitude and will keep its policy unchanged. Despite the fact that the yield on UK government bonds rose sharply amid expectations of a faster economic recovery and higher inflation. Moreover, yesterday the head of the Bank of England Andrew Bailey said that the bank will continue to buy bonds this year, despite the fact that «inflation will remain below the target of 2%.»
The current quote for the GBP/USD pair is 1.3900. The RSI indicator is growing weakly from the neutral zone, which signals further moderate strengthening of the pound sterling during the day, until the announcement of the results of the US Federal Reserve meeting.
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