The Dollar Today: Federal Reserve Rate Meeting Looms Large

Canadian dollar weekly graph

The Federal Reserve is raising its benchmark interest rate to reflect a solid US economy and signaling that it's sticking with a gradual approach to rate hikes for 2018 under its new chairman, Jerome Powell.

The 2.8% uptick in average weekly earnings in the three months to January suggests that wage growth is starting to pick up more substantially, to the benefit of consumers. In December, officials said they expected unemployment to be 3.9 percent both this year and next. The action was approved 8-0, avoiding any dissents at the first meeting that Mr Powell has presided over as chairman since succeeding Janet Yellen last month. Fed officials "will likely discuss the risks of a trade war during this meeting", she says, but the details of that discussion won't be available until the minutes of their meeting are released in three weeks.

Central bankers did offer hints that they may raise rates a fourth time later this year as a result of faster global growth, stronger business investment and massive tax cuts. But after rate hikes, gold prices tended to drop since rising interest rates typically make non-yielding bullion less attractive. A sharp rise in wage growth reported in the government's January jobs report triggered fears that higher labor costs would lead to higher inflation and, ultimately, to higher interest rates.

That mortgage owner could pay an additional $312.50 a month, or $3,750 a year, in interest if the Fed follows through with two more quarter-point hikes this year. Price gains are still expected to stabilize around the Fed's 2 per cent target over the medium term, the FOMC said.

Rates are still historically low.

Dollars exchange rates could still find a rallying point in the wake of the Fed announcement, though, if the latest economic forecasts and dot plot are more hawkish in nature.

It cited a stronger outlook for economic growth and did not give reasons for the higher projection - saying that it was based on the median expectations of the committee.

The 2018 "dot" now sits at 2.125 percent - signaling three rate increases from the current 1.25-1.5 percent range, and four officials had higher projections at the December meeting. The US jobless rate held at 4.1 per cent in February, equal to its lowest since the tech boom, while payroll employment expanded by a robust 313,000. The Fed's preferred measure of inflation was expected to end 2018 at 1.9 percent, unchanged from the previous forecast, but it is seen rising a bit above the Fed's target next year. It is the sixth increase since December 2015, when it began raising rates from rock-bottom levels. That was an increase of a quarter of a percentage point.

A smaller-than-expected uptick in public sector net borrowing for February offered further support to GBP exchange rates, boosting confidence in the underlying health of the United Kingdom economy.

US economic strength is evident with the unemployment rate at a 17-year low and companies receiving windfalls from President Donald Trump's tax cuts, which they may reinvest to create jobs and improve wages.

The outcome of the Fed meeting is due at 18.00 GMT (14.00 Eastern Time), so expect some volatility in the Dollar exchange rate complex.

Meanwhile, in data, United States total homes sales in February jumped to 5.54mln, up from 5.38mln, with economists having expected a reading of 5.4mln.


  • 'The youngsters are coming', warn Indian Wells finalists

    'The youngsters are coming', warn Indian Wells finalists

    It seems unlikely: the only sign of her nerves and lack of experience surfaced as she lifted the heavy BNP Paribas Open trophy. Whereas, Kasatkina edges closer than ever to a top-10 debut, finding herself at the 11th spot after a terrific fortnight.
    USA  drama on Prince Harry, Markle leaves royal society furious

    USA drama on Prince Harry, Markle leaves royal society furious

    But that is paltry compared to her future husband's inheritance. has contacted the Kensington Palace for a comment. Prince Harry is said to be the one who is against it.
    Real Madrid star Cristiano Ronaldo reveals who's the best in the world

    Real Madrid star Cristiano Ronaldo reveals who's the best in the world

    "The better Cristiano Ronaldo is, the better Real Madrid will be", Vazquez said, according to Goal . In all competitions this season, Ronaldo has scored a total of 37 goals .
  • Officer stops Maryland school shooter

    Officer stops Maryland school shooter

    Hogan. "I just thank God I'm safe", Rhames told the newspaper. "I never thought something like this would happen here". Her daughter is now attending a SCV school, and her family plans to move once their house in Maryland has sold.
    Neymar Wants £1m A Week Mega Contract At PSG

    Neymar Wants £1m A Week Mega Contract At PSG

    Speaking to Canal+, the Brazilian star said that he was "sure" that the €222 million attacker "will stay". But it remains to be seen whether or not Les Parisiens will give in to the whopping salary demand.
    The Turks controlled Afrin: Kurdish promise to be a partisan

    The Turks controlled Afrin: Kurdish promise to be a partisan

    The success of Turkish led forces in Afrin is threatening to create its own momentum for a further escalation in the military conflict.
  • Cutting ties with sanctuary laws

    Cutting ties with sanctuary laws

    The vote in the community 20 miles (32 kilometers) southeast of downtown Los Angeles comes less than two weeks after U.S. The sanctuary city movement has wide support among elected officials in the left-leaning state, the newspaper said.
    Dozens of homes believed destroyed in New South Wales bushfire

    Dozens of homes believed destroyed in New South Wales bushfire

    Information about specific homes which have been impacted is being provided to residents through the evacuation centre at Bega. A watch-and-act warning was put in place for the area on Monday morning, as firefighters said the fire was "controlled".
    Supreme Court To Hear Arguments In 'Crisis Pregnancy Centers' Case

    Supreme Court To Hear Arguments In 'Crisis Pregnancy Centers' Case

    The case pits free speech rights against access to abortion and it drew protesters from each side to the Court's plaza. Klein, a lawyer for the state, said the required disclosures provided information where and when it was most valuable.
  • Federer frustrated by Indian Wells final defeat

    Federer frustrated by Indian Wells final defeat

    Putting all the unforgiving times aside, del Potro break the shackles to clinch his first Master's title at Indian Wells . However Federer broke right at the pivotal moment to go up 5-4, and it looked like it was all but over for Del Potro.
    Sensex rises 74 points in volatile trade ahead of US Fed meet

    Sensex rises 74 points in volatile trade ahead of US Fed meet

    The German DAX rose 0.4 percent, while France's CAC 40 index and the U.K.'s FTSE 100 both inched up around 0.3 percent. The Sensex has so far touched a high of 32,876.65 points and a low of 32,810.86 points during the intra-day trade.
    Look at This Painting Jim Carrey Made of Sarah Huckabee Sanders

    Look at This Painting Jim Carrey Made of Sarah Huckabee Sanders

    See a selection of the complaints directed at Carrey below. "Monstrous!" Carrey wrote in a tweet , accompaning the portrait. Fox describes the portrait as showing the White House Press Secretary in a "terrifying garish light".


Latest news

Spring arrives - with snow on the way for the mountains
With the overnight low falling to 32 degrees, there is the slightest chance that slick roads will freeze before dawn Thursday . Some of those showers could include a mix of rain and snow as temperatures fall into the low 30s by early Saturday morning.

Difficult for Liverpool sensation Salah to resist Madrid, says Wright
Just to make matters clear, we're obviously allowing those players who scored five in a game as answers because they had to score four to get to five.

Oil Prices Up As EIA Confirms Crude Draw
Saudi Arabian Crown Prince Mohammed bin Salman is now touring the United States and will meet with US President Trump later today. Official US production and inventory data will be released by the Energy Information Administration (EIA) later on Wednesday.

Meghan Markle And Prince Harry Reveal Details Of Wedding Cake
Traditionally , royal wedding cakes have contained multiple tiers of fruit cake with white or cream cheese frosting, according to Harper's Bazaar .

WWE SmackDown Results: Daniel Bryan is back
Bryan says that Shane was right, he was living vicariously through them but assaulting Shane was more than "getting carried away". It was initially thought that Bryan might have left WWE in September in order to wrestle elsewhere such as in New Japan or ROH.

Gambia To Sign African Continental Free Trade Area Agreement
The AfCFTA is aimed at creating a single continental market for goods and services with free movement of businesses and investments.

Despite being invite-only and iOS-exclusive, Fortnite already dominates the charts
But is there Fortnite mobile controller support? Fortnite is available now in early access on iOS devices, PC, PlayStation 4, and Xbox One.

Toys 'R' Us/ Babies 'R' Us Closing Info: Gift Cards, Registries & Sales
Whether you want to plan one last trip and stock up or need to figure out if your gift cards are still good we can help. Toys "R" Us said the customer programs, including Reward dollars and Endless Earnings, will also end.

Judge won't dismiss 'Apprentice' contestant's sexual-misconduct suit against Trump
Although Trump now must respond in court to the complaint, an immediate appeal is highly likely. Supreme Court cases requiring courts to show deference to the president and his schedule.

Syria monitors: IS militants seize Damascus neighborhood
On Monday, the militants pounced on Qadam from the neighboring Hajr al-Aswad and Yarmouk neighborhoods, which they control. Around 50 civilians have also been killed by rebel shelling on the capital, the Britain-based monitor has said.

Nigerian forces failed to act on mass abduction warnings: Amnesty
The source said the Idris will also visit Dapchi community in Yobe State to commiserate with their families of the 110 abducted girls.

Meet the Carpool Karaoke mums who brought James Corden to tears
And today, ahead of World Down's Syndrome Day , they performed it on the show alongside Phillip Schofield and Holly Willoughby . Rebecca Carless, who appears in the video with her 4-year-old son Archie, described the reaction it had received as "mad".

Police Say A 'Serial Bomber' Might've Set Off Explosions In Austin
CBS affiliate KEYE-TV reported that the incident happened in the 4800 block of Dawn Song Drive near Mopac and 290 around 8:45 p.m. The victims were hospitalized in good condition, though one reportedly suffered from an apparent shrapnel wound caused by a nail.

Snow expected for central Pa. on Wednesday, winter storm watch issued
Snow tends to accumulate faster in rural areas and higher elevations than in urban areas and lower elevations. As of Monday morning, model tracks were still far apart in their solutions for where this storm will go.

Winning Powerball ticket worth $457M sold in Pennsylvania
The winning Powerball ticket worth $456.7 million was sold at a store in Manheim, Lancaster County, according to state officials. A lucky ticket-holder who played the Powerball in Pennsylvania won the eighth-largest jackpot Saturday.

Other news