How the Fed could crush the US dollar
Key points
- There is a 1% chance of a rate hike at tomorrow's FOMC meeting*
- There is a 40% chance of a rate hike by 2024*
- Language from Fed Chair Powell tomorrow could drastically shift the year-end probability toward 100% or 0%
FOMC meeting implications
US dollar could be directly impacted by a shift in expectations. Last week, EUR/USD fell after the European Central Bank meeting despite a 25 bps increase in rates. The conclusion from the ECB was that this hike would likely be the last in 2023. A similar message from the Fed could weaken USD, while indication of another rate hike could send the dollar higher.
How to trade US dollar
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on USD pairs
Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.
*Probabilities generated using CME's FedWatch tool
This information has been prepared by tastyfx, a trading name of tastyfx LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. tastyfx accepts no responsibility for any use that may be made of these comments and for any consequences that result. See our Summary Conflicts Policy, available on our website.
