Talking Points:

- The big item across global markets is tomorrow’s FOMC[1] rate decision, in which a hike appears to be almost a foregone conclusion at this point with probabilities hovering at around 94.4% (via CME Fedwatch). More pressing is whether the Fed thinks they can get four full hikes through this year, as was alluded to by Mr. Jerome Powell at his Humphrey Hawkins testimony a few weeks ago.

- Mr. Powell’s first major appearance at that Humphrey Hawkins testimony produced some interesting moves, key of which was weakness in US equities. That reaction was complicated by the ‘tariff announcement’ that came-out shortly after he finished speaking on day two, but that appeared to wipe out Powell-fueled gains in the Greenback as the general trend of USD-weakness continued into the next week.

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Jerome Powell’s First Rate Decision: FOMC Is On Deck for Tomorrow

Tomorrow is all about the Fed[6]. The rate decision is announced at 2PM ET, and the accompanying press conference begins thirty minutes later. This will be new Fed Chair Jerome Powell’s first rate decision atop the bank, and in many ways, this will be markets’ first opportunity to see Mr. Powell in action. While he did have a public appearance earlier this month with the Fed’s Humphrey Hawkins, his testimony was perhaps a bit obscured by the topic of tariffs that dominated the headlines later that week.

The net takeaway from Mr. Powell’s first appearance was US Dollar strength[7] to go along with equity weakness. The S&P 500[8] started a bearish reversal right as Mr. Powell began speaking on the first day of that testimony, and the sell-off continued through the week. The US Dollar, on the other hand, caught a quick pop of strength around day one, and that strength continued until he finished speaking on day two. But the tariff announcement that came out shortly after Mr. Powell had finished his testimony reversed that strength, and sent the US Dollar in a tailspin that didn’t begin to slow[9] until support showed around 89.50 on the following Tuesday.

On the below chart, we can see that three-day sequence in action[10]. In blue, we have the top-side run in the Dollar that began around Mr. Powell’s first day of testimony. And that ran all the way through his second day of testimony on Thursday, at which point the announcement of tariffs on

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