Forex Marketz Daily Forex News – Fully Markets Update
The U.S. dollar continues to remain on the back foot against most of its G-10 Forex trade partners during the Asian trade session. Forex traders are waiting on the U.S. Federal Reserve Board to announce their monetary policy and rate decision later today.
Currency traders are thinking that the Federal Reserve will take measures to get the recent rise in Treasury yields under control in order to keep borrowing costs low for the Federal Government.
Both the New Zealand and Australian currencies (NZD, AUD) are pulling back against the U.S. dollar (USD), however sentiment remains upbeat as economic activity continues to increase. This has capped losses for the commodity and sentiment linked Forex assets. Nations are starting to roll back lockdown measures and reopen economies.
The dollar is little changed against the Japanese yen. The USD/JPY Forex market is trading hands at 107.75 yen after falling 0.6 percent on Wednesday.
The GBP/USD currency exchange rate is trading near a three month low price point at $1.2713 during the early Asian trade session.
Dollar Traders are waiting on the Fed to Respond to Yield Rates
The main focus for currency and other financial market participant will be on the Fed policy meeting and announcement later today. No changes to rates or monetary policy is expected.
With that said, Treasury yields have been pushing higher as there are signs that the U.S. economy is starting to stabilize and recover from the Covid-19 (coronavirus) lockdown.
Traders are starting to think that the Fed will adopt a yield curve control to guide the benchmark ten year yield lower. This is a remote possibility but uncertainty will continue to keep the greenback under pressure.
The FOMC is now in Focus
The Federal Open Market Committee (FOMC), which is the monetary policy arm of the Federal Reserve. The FOMC will announce their June monetary policy and rate decision.
The Federal Reserve will also publish economic projections for the first time since March. Also of interest will be the FOMC monetary policy statement and Federal Chair Jerome Powell’s press conference.
