All major currencies are trading within narrow ranges on Wednesday, as the FED meeting scheduled for later today has captured the attention of investors, awaiting to hear about the decisions and forward guidance, before making a move. Whilst it is taken for granted that there will be a 25 basis points cut in the US interest rate, a move currently priced into the value of the Greenback, the focus of interest will be on future guidance.
The Chairman of the FED, Jerome Powell, will speak at the end of the event and his words and tone will be closely scrutinised. Should there be no further stimulus measures besides the rate cut, and Mr Powell’s stance be less dovish than many expect, there may be scope for substantial Dollar gains, especially against the Yen, as many investors will look to close short Dollar positions.
Photo by JP Valery.
