Home USD: FOMC On Hold With A Balanced Message; Expected USD Response – BofAML
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USD: FOMC On Hold With A Balanced Message; Expected USD Response – BofAML

The US Dollar is eagerly awaiting the Fed decision. How will the greenback respond?

Here is their view, courtesy of eFXdata:

Bank of America Merrill Lynch Research discusses its expectations for the FOMC policy meeting on Wednesday.

“As widely  expected,  we  expect the FOMC to  stay on hold at the conclusion of the  30  April-1  May meeting.  The Fed  should deliver a balanced message  on the economy  through the policy statement and the press conference,” BofAML projects.

“A hawkish rates response to this Wednesdays FOMC decision is likely to provide support to the USDFOMC decisions have tended to support USD in the days following Fed statement release. Over the last year,  the  US Dollar Index (DXY)  was up 8  times  and down  zero for an average return of about 1% five days post-Fed. Notably, current price action as measured over the last 20 days is about 90% correlated to April 2018 decision, after which  the  DXY appreciated by about 3% over the next month.

 Moreover, USD  carry remains strong, seasonals bullish and volatility abnormally low. This  combination  can support further USD gains  over the near term,” BofAML adds.  

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.