The US Dollar had the flat movement to some major currencies on Wednesday sales. It is because the investors still have the wait and see decisions ahead of the Fed policy announcement. The USD index is now at around 91.93.
It means that the currency was slightly stronger for 0.07 percent from its daily open level. You can say that the whole index which measured the dollar is in a consolidation phase. The policy announcement from the Fed is always awaited and highlighted.
It is because the investors in this world want to find any clues about the point of view having by that organization due to the United States economic condition. The Central Bank is expected to state the optimistic outlook on unemployment and inflation.
The Fed May Not Change Its Policy
Many parties believe that The Fed will not change its monetary policy. It is especially when they announce everything this month. It is because there is not any growth of inflation and the market equity seems normal after last week's situation.
That is a worry about the obligation. Based on an expert, the consumer inflation release, producer, and the American retail sales data reflect that the road ahead is still so long. There is not any urgent condition from the Fed to do a rate hike.
Furthermore, the investors will also See on anything said by the Fed due to the obligation yield jump several weeks ago. However, it is quite difficult to know how far the FOMC together with Powell will maintain that obligation yield jump.
Maybe, the investors are overreacting to the United States monetary tightening. If that statement is correct and the Fed’s statement will be dovish, it will become a negative catalyst for the USD movement. That condition may push greenback to other currencies.
The US Dollar Is Slightly Increased
Based on the data, the US dollar was slightly increased on Tuesday's sales session last night. The USA retail sales report was disappointing, but the investors still wait for the FOMC meeting results announcement that will be held this day on Thursday.
The index of the dollar was sold in 91.92 when this news was written. It maintains the increase formed since last week. For your information, the American Retail Sales data in February declined by 7.6 percent to -3.0 %. It was under the expectation owned by people.
It is because the data in that monthly base is twice lower than the expectation. This retail sales decline is the second-lowest data since April 2020. The core retail sales there are also decreasing significantly. It reached the -2.7 percent level from 8.3%.
An economy expert compares the data in January and February. The sales increased in January was the effect of stimulus given because of the pandemic situation. That fund was given by the Government in December. Meanwhile, February is the side effect of the climax.
The Fed Comment about Obligation Yield is Awaited
The FOMC is expected will not change its policy in this week's meeting schedule. However, the economic forecast may reflect the United States economic growth this year which is growing rapidly. The unemployment rate is decreasing and inflation is up.
The data owned such as about the producer, consumer inflation, and even the United States retail sales this morning is still far from a condition that needs monetary knowledge. However, the investors will highlight everything which will be stated by The Fed.
It is especially about the obligation yield rally. That thing may increase a betting that the economic growth and inflation will push the monetary policy normalization which is faster than the expectation. The dollar can be stronger if The Fed shows a hawkish statement.
