Baxia Markets
June 17, 2021

How is the Fed Rate Decision affecting EURUSD?

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EURUSD has been on an uptrend since March 2021. The pair has had a few pullbacks, but the overall uptrend continues; however, in the last eleven trading sessions. The pair has been moving up and down, totaling a loss of 1.02%, which is not very significant; what is relevant here is that the USD could get stronger based on fundamental news. 


The FOMC releases interest rate decisions, economic projections, a statement, and a press conference, contributing to higher volatility for the pair in the short and medium term.


EURUSD June 15th 2021


The interest rate is expected to stay at 0.25% for the remainder of 2021. However, traders are also looking to predict how rates will change in the future. Four FOMC members are looking for a rate hike at some point in 2022, and for 2023, seven members see a rate increase.


If rates remain unchanged, attention turns to the tone of the FOMC statement, whether the tone is hawkish or dovish over future inflation developments.


The statement may influence the volatility of USD and determine a short-term positive or negative trend. Therefore, a hawkish view is considered positive or bullish for the USD, whereas a dovish stance is considered negative or bearish.


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