Will they, won’t they taper – we await the Federal Reserve’s announcement

Yesterday was again a disappointing one for the US dollar, struggling ahead of the FOMC monetary policy decision this evening. After months of speculation, tonight will reveal if the Federal Reserve has decided to taper its quantitative easing program and if so, how aggressively it decided to reduce the amount of asset purchase on a monthly basis. Encouraging signs from the US economy in the past few months has lent support to the introduction of tapering; however, labour data release in the past month has fallen short of market estimates. At present, analysts are suggesting the Federal Revere will decide to reduce the amount of asset purchased it makes on a month basis by $5-15 billion (currently $85 billion a month). This prediction is thought to be largely priced into the market; however, any significant variation away from these levels and we are likely to cause a significant amount of volatility across the market. Building permits released this afternoon could provide further possible volatility ahead of tonight’s central bank decision. Get in touch with your trader now for an up to the minute price on the US dollar, on the most important day for the currency in recent weeks.