Dollar steadies ahead of FOMC


The Fed is widely expected to keep interest rates unchanged at its two-day meeting that ends on Wednesday. Investors will be watching for any clues on whether it may raise rates again this year, and when it will begin paring its massive bond portfolio.

There is some focus on the possibility that the Fed could indicate September as the starting date for reducing its balance sheet, said Stephen Innes, head of trading in Asia-Pacific for OANDA in Singapore.

Such a hint from the Fed would not come as a big surprise, and may not provide much of a lift to the greenback, Innes wrote in a note, adding, “It will be the inflation language where a possible dovish skew will emerge.”

Sluggish inflation has kept the dollar under pressure and led to uncertainty on whether the Fed will raise interest rates again this year.

Still, the dollar regained some ground against major currencies in the previous session, as U.S. Treasury yields rose along with U.S. equities.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes