Dollar Index Trades Lower Ahead of Fed's Interest Rate Decision
The US Dollar Index trades marginally lower ahead of the Federal Reserve's monetary policy announcement. The FedWatch tool shows that the odds of keeping interest rates unchanged in the range of 3.50%-3.75% are 69.5%, indicating a straight fifth meeting without any monetary policy adjustment.
Investors will closely watch the monetary policy statement and remarks from Fed Chairman Kevin Warsh at its press conference to get fresh cues regarding inflation and interest rate outlook. However, Warsh is unlikely to deliver comments about the interest rate outlook as he explicitly said in the June meeting that 'so-called forward guidance is not well-suited in the current policy juncture'.
The US Dollar Index technical analysis suggests a near-term bias stays mildly bullish as price holds above the 20-day exponential moving average (EMA) at 101.09. Immediate support emerges at this level, with a break below likely opening the door to a deeper corrective move to the July 15 low at 100.35.