Should investors be wary of post-FOMC volatility?

Should investors be wary of post-FOMC volatility?

16.03.2022

In yesterday’s U.S. currency trading, the U.S. dollar was the only major currency to rise against the yen, with the USD/JPY pair touching a year-to-date high of 118.44. However, the dollar remained largely flat against the euro and the Australian dollar, with the AUD/USD pair rising slightly from 0.716 to 0.722. There has been little price movement during today’s Asian trading session, as the market adopts a wait-and-see stance ahead of the FOMC’s interest rate announcement.

European currencies are facing renewed upward pressure on the euro as Russia, which is approaching the interest payment deadline on its U.S. dollar-denominated bonds, begins to face a risk of default. Although the euro/dollar pair initially rebounded, it has been unable to break above the upper limit of the 20-day moving average on the daily chart, and with conditions remaining challenging, it would be prudent to wait and see how prices develop until the FOMC meeting early this morning.

Today, during European trading hours, the U.S. MBA Mortgage Applications Index will be released at 20:00, followed by Turkey’s Housing Price Index at 20:30. During U.S. trading hours, Canada’s Consumer Price Index and Wholesale Sales, along with U.S. Retail Sales and the Import Price Index, will be released at 21:30; U.S. Business Inventories and the NAHB Housing Market Index at 23:00; and U.S. Weekly Crude Oil Inventories at 23:30.at 03:00, the U.S. FOMC interest rate decision and statement are scheduled to be released, and at 03:30, a press conference with Fed Chair Powell is scheduled to take place. I want to assess currency strength and weakness while focusing on today’s FOMC meeting.