The FOMC statement came in with a somewhat hawkish tone, stating that policymakers are closer to tapering. Federal Reserve Chair Jerome Powell’s press conference, however, depressed the U.S. dollar in the aftermath of the statement as he said that there was still some way to go. While no decision on taper timing had been made, Powell said officials “expect further progress” but they are “clearly a ways away” from liftoff. Economists now expect that a reduction in asset purchases (taper) will not happen until early 2022.
The next gathering of the FOMC is September 21-22 but before that, Powell will speak at the August 26-28 conference in Jackson Hole. Fed chairs have sometimes used the venue to signal policy shifts.
As for day trades there was nothing to gain yesterday with momentum in the Forex market still lacking. We therefore recommend traders staying on the sidelines during these low-liquidity periods, taking a break from the markets and adjusting risk exposure. Better trading conditions will come after the summer doldrums.
Traders will watch the U.S. GDP data today at 12:30 UTC but chances of big market moves are small.
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