Following signals from the U.S. Federal Reserve that American interest rates may be increased sooner then expected, the U.S. Dollar got a significant boost in trading last night and in the early morning today. Today, a full set of Dollar related news events will likely determine the direction the greenback goes for the rest of the week.
The U.S. Federal Reserve (FED) left interest rates unchanged following their policy meeting on Wednesday, but an overall tone of optimism left the door open to an increase in the near future. The Dollar reacted to the news by shooting up to a near 6-month high against the Euro. The pair was trading as low as 1.3994 on Wednesday, before rebounding to its current level of 1.4020.
Today, the forex news cycle will be dominated by Dollar events. Core Durable Goods Orders, the latest Unemployment Claims report, as well as the Senate vote to reappoint Ben Bernanke as chairman of the FED, are all likely to create heavy market volatility.
Analysts are generally optimistic about today’s Dollar news, with unemployment forecasted to drop and the Core Durable Goods Orders in positive territory. Traders can expect the Dollar to make further gains today providing the news comes in as predicted. This will likely be especially true against the Euro, which is still reeling from Greek debt concerns.