Fed Raises Rates, Dollar Is Down Due To Concerns About Trump’s Policy!


The Federal Reserve raised interest rates on Wednesday but left its outlook for the coming years unchanged even as policymakers expected a short-term jump in US economic growth from Trump’s proposed tax cuts. In an early ruling on tax review, federal policymakers said it would boost the economy next year, but it would leave no lasting effect, with the long-term potential growth rate of 1.8 percent. The White House has often said the tax plan would produce annual GDP growth from 3 percent to 4 percent.

The expected fiscal stimulus, followed by a wave of relatively bullish data, paved the way for the US central bank to raise interest rates by a quarter percentage point to 1.25 percent to 1.50 percent. This is the third rate hike this year.

But the Federal Reserve’s forecast for three additional price increases in 2018 and 2019 remained unchanged from its September forecast, suggesting that tax legislation passing through Congress would have a modest effect …

The persistent deficit in inflation from the Federal Reserve’s 2 percent target was the main part of the “uninterrupted work” that Paul was leaving to find out, Yellen said.

But the central bank’s expectations also included some potential pitfalls for the next Federal Reserve chairman, Jerome Powell, because of Trump’s policy, which has made many investors move towards Europe and Japan, even Europe is trying to ease its relationship with Trump … All this has negatively impacted the US dollar?!!

Why the dollar fell yesterday?!!!

Investors/market makers are concerned about the policy of next Fed Chairman Jerome Powell, Yellen indirectly confirmed the reality of these concerns, prompting investors to sell the dollar while Yellen was speaking!

If you are interested:

Technical Outlook

The U.S dollar index fell from 94.06 to 93.36 levels, at the moment the pair remains in a pullback mode and further down could be seen, but the downside below 94.06 should be contained well by the 93.10 levels where rebound is likely, below 91.10 will reverse risk to the downside to 92.46/91.91 levels, further down support comes at the 91.19/90.00 levels. On the upside, above 94.06 will restore the upside momentum and challenge the double top around 95.04 levels…

EURUSD: The pair remains in a recovery mode above 1.1731 levels, but the recovery above that level should be limited by the 1.1847 levels, above 1.1847 will aim the 1.1936 levels, below 1.1731 will restore the downside momentum. (Minor support: 1.1809, 1.1762)…

GBPUSD: The pair recovers above 1.3300 levels, further upside could be seen to the 1.3475 levels where rejection is likely, above 1.3475 will look for 1.3550/1.3595 levels. below 1.3300 will restore the downside momentum and aim the 1.3209 levels ahead of the 1.3135 levels…(Minor support: 1.3427, 1.3345)…

USDJPY: The pair remains in a pullback mode below 113.55 levels, support comes at the 112.65 levels ahead of the 112.21 levels(main), below 112.21 will turn outlook bearish to the 111.63/110.85 levels. Above 113.55 will restore upside momentum and aim the 114.27/114.87 levels.

USDCHF: The pair around critical support 0.9842, a failure to hold below that level could mean a return to the 0.9925 levels, a break will aim the 1.0017/1.0037 levels. below 0.9842 sees a fall risk to 0.9791/0.9755 levels.

AUDUSD: The pair is bullish above 0.7551 levels, eyes the 0.7675 levels, a halt is likely and it may turn lower from here if seen support will come at the 0.7638 levels ahead of 0.7551 levels (main). Above 0.7675 will extend gains to the 0.7729 levels ahead of the 0.7769 levels. On the downside, below 0.7551 sees a lower leg below 0.7500 levels.

USDCAD: The pair consolidates with upside bias above 1.2779 levels, eyes the 1.2933 levels, a break will aim the 1.3012 levels, below 1.2779 sees a fall risk to the 1.2625 levels…

Stay tuned for more upsides…