Strong losses expected for the dollar after the decisions of the US Federal Reserve!

 Strong losses expected for the dollar after the decisions of the US Federal Reserve!

 Arab Trader |  Dec 14, 2022 11:10 a.m

 Be the first to comment

 

 Arabictrader.com - The US Federal Reserve’s decisions on monetary policy are scheduled to be issued today, Wednesday, which will be followed by a press conference by the Bank’s Governor, Jerome Powell, to comment on these decisions.  Others such as gold, in addition to the US stock market and digital currency markets, the following is a look at how the circumstances of this decision, and how it affects the markets:

 First: the economic conditions and their impact on the decisions of the US Federal Reserve

 Since the US Federal Reserve meeting last November, many important economic data appeared that strongly influenced the dollar's movements against currencies and supported the continuation of the US Federal Reserve's interest rate hike, but at a lower pace, led by inflation data.

 In this context, we find that the US inflation index slowed to a level of 7.1% at the end of last November, less than market expectations that the index would record about 7.3%.  It is also lower than the previous reading, which recorded about 7.7% last October.

 On the other hand, the US labor market data witnessed a strong improvement, as the employment change index in the agricultural sector increased by 263 thousand jobs in November, better than market expectations, which indicated an increase in the index by about 200 thousand jobs.  Meanwhile, the US unemployment rate stabilized at 3.7%.  Wages also recorded a growth of 0.6% during the same period.

 Hence, it can be said that the slowdown in the pace of inflation during the last period may push the US Federal Reserve to slow down the pace of interest rate hikes during the coming period, especially since the fruits of tightening monetary policy have begun to appear, which will make the US Federal Reserve more careful when making upcoming monetary policy decisions.

 Second: Statements by US Federal Reserve members about interest:

 The tone of the statements of many members of the US Federal Reserve tended during the last period towards the continuation of raising interest rates, but at a slower pace, especially with the slowdown in the rate of inflation during the period.