The Fed was very clear regarding the rate decision yesterday. In addition to the positive outputs from the FOMC meeting, it seemed that they were preparing the market for a rate hike in mid-2015.
The Fed announced that it wasn’t concerned with the underutilization of the labor market’s resources as there have been signs of improvement reflected in maintained job gains and a lower unemployment rate.
The Fed is no longer worried about a slowdown in the global growth, which affects the US Economy, as it’s not considered a threat anymore.
We can simply conclude from the Fed announcement that:
- The Fed is no longer worried about the global growth, which weakens the performance.
- It has a solid and improving labour market
- It assured the expectations of raising the interest rate next year
- The lower USD is temporarily considered
- There are no concerns about the low inflation
- It was confident and hawkish
- The higher exchange rate is not an issue for the US Economy
As for today’s figures, there are a few major releases with medium impact on the Forex market scheduled for release from Spain and the UK; followed by a major release from Germany. The German Unemployment Change announcement will be released at 08:55 GMT, measuring the change in the number of unemployed people during the previous month.
- Forecast: 5K
- Previous: 13K
A higher than expected reading should be taken as negative for the EUR, while lower than expected reading should be taken as positive for the EUR.
As for Europe, a couple of releases, which are related to the economy’s expectations and consumer confidence with low expected impact on the Forex market, will be released at 10:00 GMT.
Moving to the US, a high impact release is scheduled for release at 12:30 GMT. The Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of the economic activity and the primary indicator of the economy's health.
- Forecast: 3.0%
- Previous: 4.6%
A higher than expected reading should be taken as positive for the USD, while a lower than expected reading should be taken as negative for the USD.
The Federal Reserve Chair Jennet Yellen is expected to speak today. Being the head of the Fed, which controls short term interest rates, she has more influence over the American Dollar's value than any other person. Traders scrutinize her public engagements for clues regarding the future monetary policy. Her comments may determine a short-term positive or negative trend.
Please monitor the entire day releases, as they might determine the future trend of the EUR/USD.
Some few releases related to the JPY should be monitored at 23:30 GMT.