Large movements may be seen in markets today after the release of Fed's decision on monetary policy. Earlier, many expressed their belief that the US central bank will make its last rate increase this month, signal an easing, then take a short pause to assess the impact of the previous rate hikes on the country's economy. If this really happens, the US stock market will bounce up, with the trend shifting from bearish to bullish. But if the opposite occurs and the Fed makes it clear that it is too early to change their view on the pace of rate hikes, another wave of sell-offs will take place, especially in the stock markets, while US Treasury yields will rise.
In short, the Fed meeting ahead is a key in the reversal of markets, though a lot will depend if the US economy is entering a recession or not. Another factor is the quarterly reports of companies.
As for dollar, the change in the Fed's policy will put pressure on it, possibly causing noticeable changes. The behavior of Treasury yields will also affect USD, in which a decline will lead to a price decrease. If there are no changes, dollar will climb further, while gold prices may update recent lows.
So far, a change in the Fed's policy is highly likely since members have recently stated their support on the slowdown of rate hikes. The stabilization of consumer inflation may also convince the central bank to resort to this option.
Forecasts for today:
EUR/USD
A change in the Fed's policy could push the pair above 0.9900, to 1.0050 and then to 1.0150.
USD/CAD
The weakening of dollar and increase in oil prices could bring the pair down to 1.3500 after falling below 1.3570.
Relevance up to 08:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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