The Federal Reserve’s interest rate decision was in line with market expectations, as the U.S. central bank held rates steady for the third consecutive meeting. However, despite an upbeat Non-Farm Payrolls (NFP) report released last Friday and November’s Consumer Price Index (CPI) remaining above 3%, the Fed chief struck a dovish tone in his post-meeting statement.
Discussions about when policymakers might start cutting interest rates emerged, leading to a rally in U.S. equity markets. In particular, the Dow Jones Industrial Average led the way, reaching an all-time high. Conversely, the Australian dollar was buoyed by upbeat employment data amid a weaker US dollar. As a result, the Aussie dollar traded at its highest level against the U.S. dollar since early August.
Dollar Index, H4
The Dollar Index remains range-bound as investors await the Federal Reserve’s upcoming monetary policy decisions. The recently released Consumer Price Index (CPI) data, which showed a slight increase in November, hasn’t changed the overall trend for the Dollar. Eyes remain fixed on the Fed’s statement, with expectations leaning towards a dovish stance, which could impact rate cut expectations and the Dollar’s appeal in the market.
The Dollar Index is trading higher and is currently near resistance. However, the MACD is showing diminishing bullish momentum while the RSI is at 58, suggesting that the index may experience a technical correction as the RSI has dropped sharply from the overbought territory.
