Forex Today: Fed rate decision, revised dot plot to trigger next big action
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Here is what you need to know on Wednesday, December 18:
Financial markets remain quiet midweek as investors stay on the sidelines while getting ready for the Federal Reserve (Fed) to announce its monetary policy decisions following the last meeting of the year. During the European trading hours, Eurostat will release revisions to Harmonized Index of Consumer Prices (HICP) readings for November. Ahead of the Fed decision, November Housing Starts and Building Permits data will be featured in the US economic docket.
US Dollar PRICE Last 7 days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | 0.53% | 1.00% | 1.09% | 0.93% | 0.95% | 1.06% | |
| EUR | -0.17% | 0.36% | 0.82% | 0.91% | 0.76% | 0.77% | 0.87% | |
| GBP | -0.53% | -0.36% | 0.45% | 0.55% | 0.40% | 0.41% | 0.50% | |
| JPY | -1.00% | -0.82% | -0.45% | 0.09% | -0.06% | -0.05% | 0.05% | |
| CAD | -1.09% | -0.91% | -0.55% | -0.09% | -0.15% | -0.14% | -0.05% | |
| AUD | -0.93% | -0.76% | -0.40% | 0.06% | 0.15% | 0.02% | 0.11% | |
| NZD | -0.95% | -0.77% | -0.41% | 0.05% | 0.14% | -0.02% | 0.10% | |
| CHF | -1.06% | -0.87% | -0.50% | -0.05% | 0.05% | -0.11% | -0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
In the absence of high-impact data releases and fundamental drivers, major currency pairs fluctuated in relatively tight ranges on Tuesday. The US Dollar (USD) Index posted small gains but failed to stabilize above 107.00. Early Wednesday, the index moves sideways near 106.80, while the benchmark 10-year US Treasury bond yield holds steady slightly below 4.4%. The Fed is widely expected to lower the policy rate by 25 basis points (bps) to the range of 4.25%-4.5%. The revised Summary of Projections (SEP), also known as the dot plot, published alongside the policy statement will provide important clues about how many more rate cuts Fed officials project in 2025. Finally, Fed Chairman Jerome Powell will speak on the policy outlook and respond to questions in a press conference starting at 19:30 GMT.
The data published by the UK's Office for National Statistics showed that annual inflation, as measured by the change in the Consumer Price Index (CPI), rose to 2.6% in November from 2.3% in October. This reading came in line with the market expectation. In the same period, the core CPI rose 3.5%, up from the 3.3% increase recorded in October but below analysts' estimate of 3.6%. On a monthly basis, the Retail Price Index rose 0.1%, while the Producer Price Index - Input remained unchanged. GBP/USD largely ignored these figures and was last seen trading at around 1.2700.
EUR/USD extends its sideways grind slightly above 1.0500 after posting marginal losses on Tuesday.
USD/JPY corrected lower and snapped a six-day winning streak on Tuesday. The pair holds its ground early Wednesday and trades at around 153.50.
Gold failed to make a decisive move in either direction on Tuesday and closed the day little changed. XAU/USD remains confined in a narrow channel below $2,650 in the early European session on Wednesday.
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* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
