Will the US Dollar Continue Falling Ahead of the Fed Meeting?

FXOpen

The US dollar has demonstrated a remarkable level of stability against its major counterparts, including the British Pound and Euro, over the past day.

Despite the ongoing two-day policy meeting by the US Federal Reserve Bank, the currency's stability remains largely unaffected. The Federal Reserve's policy meetings have historically been closely monitored by investors and have been known to trigger significant fluctuations in currency markets.

However, recent trends indicate that investors are no longer overly concerned about any major policy changes resulting from these meetings. The US dollar's resilience in the face of the Fed's actions suggests that market participants have come to accept higher interest rates as part of the current economic landscape.

In the short term, this sense of stability and adaptability has been bolstered by positive economic indicators. The United States government is poised to announce the GDP figures for the second quarter of this year (Thursday 15:30 GMT+3), with analysts predicting a steady boost of 2% over the previous reporting period. This indicates a consistent growth trajectory for the US economy, which may contribute to the US dollar's strength.

What factors will affect the USD going forward?

It is worth noting that some reporters have taken an overly short-term view. While the US dollar may appear steady against its peers at the moment, looking back over the past five days reveals a significant increase in the value of the British Pound against the US Dollar.

Check the GBP/USD chart

Indicative pricing only
Indicative pricing only

This suggests that investors have greater confidence in the currently steady, albeit plodding, British economy.

Comparatively, the US economy has displayed a slightly higher level of volatility, particularly in the tech industry. Interesting corporate movements in tech companies have contrasted with the more stable performance of traditional corporate giants on the FTSE 100 in the United Kingdom.

Looking ahead, the US economy appears to be on reasonably steady ground, and the US dollar has enjoyed a positive run. As such, the currency is expected to experience minimal volatility in the next few weeks.

Gone are the days of sensationalist news reports about failing banks, such as the aftermath of Silicon Valley Bank's spectacular high-profile collapse. Similarly, the concerns surrounding low-value tech stocks on NASDAQ that plagued the market last year seem to have subsided.

To maintain this relative stability, two key factors will be critical. First, the overall economy must continue to manage inflation effectively, as any sudden surge could unsettle market participants. Second, the Federal Reserve's future policy meetings must not spring any unexpected interest rate-related surprises, as these could cause uncertainty in the currency markets.

If these conditions are met, there is a strong likelihood of relative stability on par with that observed in the United Kingdom. Investors and analysts will continue to monitor economic indicators and central bank decisions closely, mindful of any potential shifts in the global currency landscape. For now, the US dollar's resilience remains a testament to its adaptability in the face of changing economic conditions.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

forex

Forex Trading with FXOpen

Forex Trading with FXOpen

Experience ECN technology for deep liquidity and light-speed trade execution

  • Access over 50 markets
  • Trade with spreads from 0.0 pips
  • Take advantage of commissions from $1.50/lot
Learn more

Latest articles

Shares

Coca-Cola Company (KO) Shares Trade Near All-Time High

Stock market charts indicate that from the start of last week’s trading through to its close:

→ The S&P 500 Index (US SPX 500 mini on FXOpen) declined by approximately 3%;
→ Pepsico (PEP) shares dropped by more than

Cryptocurrencies

BTC/USD Analysis: Bulls on the Offensive

In our previous analysis of Bitcoin’s price (14 April), we:

→ constructed a long-term ascending channel (marked with blue lines);

→ highlighted resistance level R, suggesting that the bulls were seizing the initiative in an attempt to pave the way for

Commodities

Market Analysis: Gold Extends Record Run, WTI Crude Oil Rebound in Tandem

Gold price started a fresh surge above the $3,250 resistance level. WTI Crude oil prices climbed higher above $60.00 and might extend gains.

Important Takeaways for Gold and WTI Crude Oil Prices Analysis Today

· Gold price started a

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.