The FED will likely refrain from announcing a rate hike this week, and market is not expecting any explicit change in the wording of the statement. If it does, however, will be increasing the chances of a September lift-off which should trigger a strong USD rally.
The wording will be the key, mostly to determinate the timing of a rate hike, as there's no doubt the Central Bank will start tightening this year. A more constructive assessment of the economy, particularly focused on employment and inflation, is what investors are looking for to resume dollar's buying. However, and despite a change in wording, the FED will likely reiterate its stance that the upcoming rate hike will be data dependent. In general, the macroeconomic data has surprised to the upside in the recent weeks, with core CPI inflation up to 1.8% in June, better-than-expected Durable Goods Orders, and up ticking Retail Sales, so if there are changes, should be probably hawkish.
In its latest testimony before the Congress, Janet Yellen said that " "The Committee will determine the timing of the initial increase in the federal funds rate on a meeting-by-meeting basis, depending on its assessment of realized and expected progress toward its objectives of maximum employment and 2 percent inflation." Also, she had said earlier this year that, it could happen in any meeting, and not only the ones with a press conference scheduled. Nevertheless, the general market sense is that this month meeting will bring no clarity on a date for a rate hike, and will mostly be a non-event, which may have a limited negative effect on the greenback, as it would be in line with market's expectations.
Anyway, the Federal Reserve is getting close to raising interest rates for the first time in nearly a decade, in between September and December. As closer the date, the stronger the greenback. Should the FED express some concerns over still weak wages, the market will price in a rate hike in December, which means the Central Bank won't be able to made the two rate hikes this year that many officers have been anticipating lately, and therefore, the dollar may come under selling pressure particularly against the Pound.
But in the long run, the US is still the one Central Bank that's in the path of tightening its economic policy, followed close by the BOE, and unless data begins to steadily disappoint, long term dollar bears will remain sidelined.
Recommended Content
Editors’ Picks

AUD/USD: Extra gains need to clear 0.6400
AUD/USD rose for the third day in a row, approaching the key 0.6400 resistance on the back of the acute pullback in the US Dollar amid mounting recession concerns and global trade war fear.

EUR/USD: Powell and the NFP will put the rally to the test
EUR/USD gathered extra steam and advanced to multi-month peaks near 1.1150, although the move fizzled out somewhat as the NA session drew to a close on Thursday.

Gold looks offered near $3,100
Prices of Gold remain on the defensive on Thursday, hovering around the $3,100 region per troy ounce and retreating from earlier all-time peaks near the $3,170 level, all against the backdrop of investors' assessment of "Liberation Day".

Interoperability protocol hyperlane reveals airdrop details
The team behind interoperability protocol Hyperlane shared their upcoming token airdrop plans happening at the end of the month. The airdrop will occur on April 22, and users can check their eligibility to receive $HYPER tokens via a portal provided by the Hyperlane Foundation by April 13, the team shared in a press release with CoinDesk.

Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.