The US Dollar has been waiting for today. It was slightly unsettled by weaker-than-expected housing data as the US Federal Reserves started its two-day policy meeting. At this meeting, interest rates are not expected to be changed although it is anticipated the word ‘patient’ will be removed from its policy statement later today – this would refer to rates rising later this year, and the removal would signify that a rate hike might be getting closer with the best guess from the market being June.
Following the meeting, the Federal Reserve Chairman makes an announcement and I am sure the questioning at this press conference will be robust given the on-going uncertainty about the robustness of the US economic recovery. Data releases are mixed and although unemployment Is down significantly we are seeing limited growth in wages and the strong US dollar is certainly impacting exports. Uncertainty over interest rates rises happening soon will undermine it.