March FED meeting. A chance to strengthen the dollar

One of the most important Wednesday events is the FOMC meeting. It lasts two days and will soon end with a decision (about 19: 00 Polish Time 20.03) regarding the projection of the optimal level of interest rates. The dollar has a chance to strengthen after the report on the meeting has been published.

Be sure to read: FED - One of the most influential institutions in the world

Interest rates maintained at the current level

There is no promise to change the provisions of the Fed to raise interest rates. The Federal Reserve will show first of all  patience before another modification related to the cost of money. Recently, there have been reports on the market that were in favor of reducing the current levels of interest rates. Lack of moves in this area may be associated with a mild Reserve policy. In addition, domestic factors directly related to economic growth strengthen the scope of normalization in this matter.

No risk from inflation. The risk of trade wars is getting smaller and smaller.

In addition, the lenient policy of the Federal Reserve is supported by the lack of threat from inflation. What's more, trade wars have quieted down a bit recently. This reduces the current economic tensions in China and the US. We are not talking about their complete disappearance, but they are much milder than before. Therefore, there is a good chance that the FED will continue its almost neutral policy for the economy, which could be a bucket of cold water for the current economic situation.

In the case of such turnover, the dollar can benefit from this. Although it is currently in a light defensive, the meeting and publication of the results of the FOMC meeting may work to the advantage of this currency.