In response to last week’s series of US economic statistics and the results of US financial institutions, there is a near consensus in the market that the next US FOMC meeting in May will raise interest rates by 25 basis points at about 80%. The focus of the market seems to be gradually shifting to the FOMC meeting in June.
Until now, there was a strong expectation that the interest rate hike would come to an end after the May hike. There were also speculations that the Fed would start cutting interest rates by the end of the year. However, the market sentiment turned slightly bullish due to persistent US core inflation and strong results of US financial institutions. With regards to the rate hike in June, expectations for a rate hike are currently rising to just under 20%, a significant change from around 4% a week ago.
In the foreign exchange market, the dollar index is showing signs of rebound over the weekend. However, the battle over the 10th line continues, and the dollar is not turning to a strong dollar all at once. The dollar’s depreciating trend since early March is still alive. The short-term sentiment is likely to fluctuate with each indicator announcement.
Looking for a place to sell the US dollar, the aim is to sell USDCHF or buy GOLD.