The USD weakened yesterday and during today’s Asian session, as the Fed remained on hold. The FED kept a dovish stance and signaled its readiness to cut rates. After the decision, the market seems to have priced in that the bank will cut rates by 25 bp in the July meeting as well as another 25bp in the September meeting, as per Feds Funds Futures (by 85%). As it was expected, the word “patient” was removed from its accompanying statement, signaling its readiness to act. It should be noted, that despite the dot plot not altering the member’s expectations for the interest rate level, there seems to be a shift in towards a rate cut. Fed Chair Powell, in his press conference expressed a willingness to see more solid data before the bank actually cuts rates.

Other economic highlights, today and early tomorrow

Today during the European session, we get from Norway, Norgesbank’s interest rate decision and from the UK BoE’s interest rate decision and the retail sales growth rates for May. In the American session we get from the US the Philly Fed Business Index for June and from the Eurozone the consumer confidence also for June. In tomorrow’s Asian session, we get Japan’s inflation rates for May. As for speakers, please note that ECB’s Coeure is scheduled to speak.

EUR/USD H4

USD/JPY H4

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