The greenback is flat-to-higher ahead of the Fed’s decision
Wall Street indexes finished mostly lower overnight, as investors cautiously awaited the U.S. central bank’s latest monetary policy decision. Market participants are wondering whether Powell will try to convince financial markets that the central bank can continue providing support to the economy without igniting higher inflation. The S&P 500 dropped 0.16% and the Dow Jones Industrial Average lost 0.39%, while the Nasdaq bucked the trend, rising 0.1%.
Today in Asia, equities were on the defensive as well. On the negative side, U.S. Secretary of State Anthony Blinken has released a report identifying 24 China and Hong Kong officials whose actions have reduced Hong Kong’s autonomy. He highlighted that foreign financial institutions which knowingly conduct significant transactions with these officials would be subject to sanctions. As such, Japan’s benchmark Nikkei 225 gave up early gains and slid 0.20% while South Korea’s Kospi retreated 0.64%. Australia’s S&P/ASX 200 dipped 0.47%. In China, the Shanghai Composite fell 0.03%.
European stocks opened in a mixed manner as investors await the outcome of the Fed’s two-day policy meeting later in the day. The central bank will release updated economic and interest rate forecasts that will attract market attention. Elsewhere, voting in the Netherlands’ general election will come to a close later in the day. US futures are keeping flat amid cautiousness among investors. Meanwhile, the greenback is flat-to-higher ahead of the Fed’s decision.
EURUSD has been losing ground since late last week, extending the decline below the 1.1900 figure. As such, market focus could now shift back to the 1.1835 area where multi-week lows arrive. The FOMC meeting outcome could add to the selling pressure surrounding the common currency and send the pair lower before the closing bell on Wall Street.
