Mr. Powell did state last week that a double sized rate hike is on the table in May, but the question on everyone's mind is, will he hike rates by 0.25 basis points on Wednesday as he sees the US fall deeper and deeper into higher inflation territory?
The USD last week hit a 2 year high as the green back carried on its dominance to further gain against its peers, the move may have come down to strong US data and the potential of further increases in the dot plot course in the not too far distant future. Now where will the US Dollar go from here?
Has the Greenback’ priced in the projected dot plot course? Maybe, but has it priced in the actions of Mr Powell being more hawkish if more data shows further rises in inflation?
Whatever the results on Wednesday, just remember the consensus is for a no rate hike and to stay at 0.50 basis points. You may see some wild swings before the result and if it’s a no rate hike the most probable direction of the USD will come down to Mr Powell's comments shortly after the results.
What’s your thoughts?
