The Dollar has resumed its slide after appreciating 0.4% yesterday in trade-weighted terms. However price action has been subdued following broadly-in-line US CPI-inflation data for May and ahead of today’s Federal Reserve policy meeting. The Dollar remains within a very narrow 4-session range of 0.4% and global equity indices are down only marginally at time of writing.
The Federal Reserve is widely expected to keep its policy rate unchanged but markets will be looking to the accompanying statement, updated forecasts – the first in six months – and press conference for a clearer sense of where Chairperson Powell and the FOMC stand. Specifically there is likely to be focus on whether the Fed provides any forward guidance on interest rates and the modalities of its currently open-ended QE program and multiple lending facilities in the context of very weak US and global growth but rising equity markets.
