The US dollar struggles to find direction in sessions just ahead of the US Federal Reserve interest rate announcement. The contrasting sentiments surrounding the dollar is making it hard for investors to decide their next move.
On one corner, the US President’s plan to add more sanctions on December 15 is damping trade war optimists. If Trump does not forego the new sanctions, the tension between China and the United States could heighten.
Meanwhile, on the other corner, the improvement in the US jobs report last Friday is bolstering the markets’ expectations. The US Federal Reserve will announce their interest rate decision for the last month of the year tomorrow.
So, thanks to the upbeat data from the US nonfarm payroll, the chances of the bank to cut rates slims.
Well, alongside the interest rate announcement of the US Federal Reserve tomorrow, the bank will also release its projections.
In the past, the bank reiterated that its willing to retain its rates once they see improvements in the country’s economy. The US officials will assess the effects of the three rate cuts earlier this year.
A Steady Buck
A day ahead of the decision of the US Federal Reserve, the greenback and its indices fail to take off.
The US dollar index slipped 0.04% or 0.04 points today. While the US dollar index futures for December 19 inched down 0.05 or 0.049 points in sessions.
Meanwhile, the GBP USD exchange rate gained 0.10% or 0.0012 points in trading sessions. The pair reached levels from $1.3133 to $1.3164 today.
The British pound is also struggling to rally two days before the UK elections. It does not take an expert to say that the UK elections will have a major impact in the direction of the sterling.
Moreover, the EUR USD trading pair jumped up by 0.14% or 0.0015 points this Tuesday. The pair climbed up from $1.1062 to $1.1077 in trading sessions.
After the US Federal Reserve rate decision on Wednesday, the European Central Bank will follow up on Thursday.