Author: Amar – Technical Analyst

The US dollar was down slightly yesterday as investors absorbed the latest news on the Russia-Ukraine standoff, with the dollar index briefly paring some of its losses late in the next day, President Joe Biden said a Russian attack on Ukraine remained a possibility. US President, Joe Biden, in nationally televised remarks, also said reports that some Russian forces have moved away from the Ukraine border have not yet been verified by the United States. The US dollar index was last down 0.3%, while the euro was up 0.5% against the dollar at $1.1358. The US dollar was up 0.1% against the yen at 115.64 and up 0.1% against the Swiss franc at 0.9255.

Tomorrow we have what is likely to be the biggest event for the markets this week. The Fed will release the minutes of their last meeting. There is so much emotion about what the Fed will do it, that the weekend, a voice will fly around what was a “special” meeting yesterday to increase rates. On the other hand, what could turn the discussion more hawkish is if there was any discussion about raising rates in the near term.

The US Federal Reserve will begin a clamping cycle in March with an increase in interest rates of 25 basis points. Now that the economy has recovered its pre-pandemic level, economists expected the Fed to raise the federal funds rate by at least 25 basis points at its upcoming March 15-16 meeting. Rates were forecast to rise each quarter this year to reach 1.25-1.50% by end-December, roughly where they were at the start of the pandemic two years ago. It can be said that the Fed would start by cutting $60 billion per month from its portfolio with predictions in a $20 billion to $100 billion range.