The market is waiting for the Fed's decision. What will Powell say?

The trading week on financial markets is entering a decisive phase. Investors react to the results of the largest listed companies listed on Wall Street and in Europe, and from a macro perspective, the most important factor creating volatility may be today's decision FOMC.

Will Powell dispel speculation?

However, the US Federal Reserve's interest rate decision itself may not bring an excessive spike in volatility. Why? The money market estimates that bankers will decide to keep rates unchanged with 98% probability.

On the other hand, the market's attention is turning to Powell's conference, which may dispel speculations regarding the March decision assumed by the market. It is then that a decision may be made about the first rate cut by 25 basis points (at the moment, the chances of such a scenario are 45%). Deviations of these values, positive or negative, may additionally drive the situation NFP data from the American labor market, which we will learn on Friday at 14:30 p.m.

Bigger movements on the forex market

In the first part of the session on the forex market, larger movements are already noticeable. The Japanese yen and the US dollar are the strongest currencies of the G10 countries, while pairs related to the Australian dollar and the euro have seen significant declines. The AUD's weakness results from inflation data released in the first part of the day, which was lower than expected.

Despite the weakness of the common currency, The EUR/USD pair is constantly trading above the key support zone determined by the 200-day exponential moving average. The Polish zloty is gaining this morning. We will currently pay PLN 4,0152 for the dollar, PLN 4,3387 for the euro, PLN 4,6489 for the franc, and PLN 5,0910 for the pound.

Source: Mateusz Czyżkowski, XTB