Global macro overview for 23/11/2017

The October FOMC Meeting Minutes overall report reflected recent comments by Fed members and did not point to any significant change in attitudes. Most of the members are in favor of raising interest rates in the near future, signaling their readiness to increase in December. The market valuation of this step is currently around 90% and that says a lot about market attitudes. The report also confirmed that there is a "small" group of FOMC members, who is concerned about the persistence of low inflation. In their opinion, it would be better to wait for further monetary tightening. Although at first glance it looks like a dovish signal, similar words have already been heard directly from Brainard, Bullard, Evans, and Kashkari. It is no secret that the fate of future rate hikes depends on the rebound of core inflation as well.

The minutes showed there is still a division between those who are worried the Fed might be moving too slowly amid low unemployment and those still concerned that inflation is falling short of expectations. The Fed meets again on 12-13 December and global investors and economists widely expect it will go ahead and raise interest rates, which will likely appreciate the US Dollar across the board.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market was not strong enough to break out above the technical resistance at the level of 94.27 and made a lower high at the level of 94.16 and reversed. The broken technical support at the level of 93.39 will now become resistance. The next support is seen at the level of 93.06.


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