Currency traders celebrate the May Day holidays gearing down their trading activity, although today’s FOMC meeting and upcoming Friday jobs report keeps traders wary and concentrated. Trade-weighted Dollar’s performance against six major peers has been swinging in the range of 98.80-99.00 for the third day in a row, as the economic and political agenda is basically empty for this week, except the data mentioned above.

Traders expect that the FED will leave borrowing rate unchanged, but they might add clarity to the short-term outlook for the monetary policy. Futures forecast with 95.2% that there will be no change in the rate hike, which was set by the FED on March meeting. It’s crucial to pay attention to the changes in the wording of the official FED statement, which should be available by this link:

The board consists of nine members, including Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Jerome H. Powell; and Daniel K. Tarullo. The markets remain quite sensitive and vulnerable to the comments of the FED officials, that’s why the interviews with their participation fall under the great scrutiny of the currency traders.

The Labour market in Germany continues to post signs of improvement, adding confidence to the recovery of the EU economy. Unemployment change averaged at -15K in April, according to the data released on Wednesday. Unemployment rate keeps unchanged at 5.8%, while the jobless rate across the EU is just under 10%. Unemployment is considered as a lagging indicator for GDP but can quite accurately predict the changes in consumer demand so they can be reckoned as a forerunner of recession or an economic pickup. Nevertheless, the data saw a tepid response from the Euro as the moves of majors currencies are now totally conditional upon the FED action today and its impact on the US Dollar.

Construction PMI in the UK adds to the positive streak of economic data, easing concerns over the possible fallout of Brexit in the country. In April, the index rose to 53.1 points signalling expansion, while economists expected it to rise to 52.0 points. The Pound got a bullish signal from the PMI of the manufacturing sector which also rose faster than expected, beating expectations. On Wednesday British currency retreats 0.23% due to the advances of the US Dollar.

Stay tuned for more and trade with Tickmill!

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