The Federal Reserve prepares to change its monetary policy; US Dollar receives big boost - Market Overview

The Federal Reserve prepares to change its monetary policy; US Dollar receives big boost - Market Overview

Fed suggested tapering of bond purchases could begin later this year, catapulting the US Dollar to multi-month highs after it had suffered a downward movement before the bank's minutes.

All Fed members agreed that the bond purchase reduction process must be gradual, and in no case does it link to the latest interest rate rises. The contents of the Fed’s minutes are not made public in advance, and their interpretation usually takes some time, causing market volatility, as was the case yesterday.

Fed's decision to start reversing its monetary policy could also lead to the markets anticipating decisions depending mainly on the upcoming employment and inflation figures.

Despite everything that transpired, EUR/USD ended the day practically with little changes compared to its opening price. The pair got very close to a critical support level located around 1.1704, below which a long downward spiral could open.

Yesterday was also an intense day in the commodity markets, with an accelerated sell-off due to tight liquidity and the increasing mobility restrictions caused by the delta variant.

The technical factor is also essential to consider for instruments such as oil, which has managed to drill down a vital support level located around 66.40, below which sales took flight, causing losses of more than $2. The same thing happened to Copper, the main industrial metal, which usually maintains a close correlation with the North American indices, especially the USA500.

It will be necessary to continue monitoring these crucial movements, which can strongly correlate with stock indices and the currency market.

Sources: Bloomberg, reuters.com.

Le informazioni contenute nel presente documento sono redatte da Miguel A. Rodriguez e non costituiscono né devono essere interpretate come suggerimenti di investimento. Le informazioni di cui al presente documento costituiscono comunicazioni di marketing generali a scopo informativo e, in quanto tali, non sono state preparate nel rispetto dei requisiti di legge che promuovono le ricerche di investimento indipendenti. Inoltre, non sono soggette ad alcuna limitazione sulle transazioni condotte in anticipo rispetto alla divulgazione delle ricerche di investimento in questione.

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