Forex Today: FOMC Signals 2022 Hikes & November Taper

Adam Lemon

FOMC signals rate hikes likely sooner than expected, with tapering to begin in November.

  • The US FOMC gave its monthly policy release yesterday. The Fed had been signaling no rate hikes would happen before 2024, but yesterday a majority of the FOMC saw the next rate hike as likely to be as early as 2022. As expected, QE “tapering” is indicated to begin this November if supported by data next month. The US stock market and USD were moderately boosted following the announcement, although some of these gains have been given up. Nevertheless, the bullish USD trend seems to be supported by sentiment on the FOMC output.

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  • The Bank of England and the Swiss National Bank are releasing their monthly policy statements today. Due to this and yesterday’s FOMC release, it is likely to be an active and volatile day in the Forex market.

  • In the Forex market, we have a valid long-term bullish trend in the USD, with the weakest major currencies today looking likely to be the Japanese Yen and the Australian Dollar.

  • Major cryptocurrencies have performed very bullishly over the past day, after both Bitcoin and Ethereum found support at pivotal levels.

  • Yesterday saw the Bank of Japan give its monthly policy release, which produced no surprises or major policy changes, with the key takeaway being the bank’s increasing pessimism over Japanese output and exports.

  • WTI Crude Oil has advanced firmly over the past day (due partially to falling US inventories), as have many other physical commodities.

  • Last week saw the fourth consecutive weekly fall in global new confirmed coronavirus cases after over 2 months of weekly rises, suggesting the global wave driven by the delta variant may have peaked.

  • It is estimated that 43.7% of the world’s population has had at least one dose of a coronavirus vaccination.

  • Total confirmed new coronavirus cases worldwide stand at over 230.8 million with an average case fatality rate of 2.05%.

  • The rate of new coronavirus infections appears to now be increasing most quickly in Armenia, Barbados, Belarus, Belize, Bosnia, Bulgaria, Cambodia, Croatia, Estonia, South Korea, Latvia, Lithuania, Moldova, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, and the Ukraine.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

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