Buck holds steady ahead of FOMC and Presser
The U.S. Dollar is trading in tight ranges ahead of the Federal Reserve’s decision announcement and press conference later at 2:00 PM.
Markets found some relief after several days of losses driven by a resurgence of risk aversion and unease over new technology. S&P 500 and Nasdaq futures are positive for the first time in a week. Conditions remain cautious on the FX front as investors and traders await the Fed’s first interest rate hike since 2023. Some doubt has been brushed aside regarding outside pressure on the Fed, as well as calls from various economists to lower interest rates. If borrowing costs were left unchanged, it would be a major shock to the financial environment.
Although there have been no breakthroughs in easing Middle East tensions, oil prices dipped slightly after previously reaching record levels. Reports of damaged facilities across Saudi Arabia, as well as American bases, indicate that the escalation is taking a heavy toll beyond the Strait of Hormuz and other passages. Any progress toward negotiations would certainly add volatility to markets across the board. There will be some data to digest prior to the key event of the afternoon, with the release of August Retail Sales at 8:30 AM.
What to Watch This Week…
- Bank of Japan Decision on Friday
- USA Online is always open
The complete Economic Calendar can be found here.
EUR
The Euro continues to hover around its weakest levels since mid-August as economic data has failed to impress. Along with the focus on what the Fed may do, European headlines highlighted the possibility of a truce between Russia and Ukraine that would leave energy sites untouched in hopes of increasing energy supply. The White House seemed to be behind the effort, but the lack of details had no impact on the euro, though it appeared to be a potential boost for its value. Additionally, indicators have shown that the eurozone economy is struggling. July Industrial Production contracted by (-0.1%), and a negative print was also confirmed in a revision to June’s figures. Energy costs have forced industry leaders to scale back on projects. Tomorrow, we evaluate inflation in the form of the August Consumer Price Index.