The demand for the dollar rises pending the decision of the Federal Reserve

The dollar is generally the preferred currency at the beginning of the trading day on Wednesday in Europe, driven by signs of a strengthening of the economy before the last meeting of the Federal Reserve.

At 9:15 a.m. (CET), the dollar index futures , which follow the evolution of this currency with respect to a basket of six other major currencies, rise 0.1% to 97.90, reaching around levels not seen since early December.

And profits are likely to increase in view of the apparent strength of the US economy.

A very reliable indicator of US consumer confidence impressed late Tuesday, registering its highest level since August, driven by the decline in unemployment, mortgage rates and fuel prices.

This occurs before the last meeting of the Federal Reserve.

“We expect the Fed to keep its target range unchanged at 1.50-1.75%, without making any major changes to its announcement,” said Danske Bank, in a research note, echoing the opinion of the majority in the market.

The Fed president, Jerome Powell, is likely to be asked about his views on recent events around the Asian coronavirus, “but we hope he says that it is one of the risks the Fed is following closely. in other words, the Fed probably does not adopt a prudent tone given that the labor market continues to adjust and the growth of private consumption remains strong. ”

At 9:15 a.m. (CET), the EUR / USD pair is left 0.2% to the 1,1002 level.

The pair is still trying to get closer to the 1.0980 region, according to Karen Jones, head of the FICC technical analysis research team at Commerzbank (DE: CBKG).

“The EUR / USD pair is still under great pressure and the focus is on the November lows recorded at the 1.0981 level,” he adds.

On the other hand, housing prices in the United Kingdom rise 1.9% compared to the previous year, the highest increase since November 2018, according to the Nationwide Building Society.

This will give the Bank of England what to think before Thursday’s meeting, particularly after last week’s PMI data, better than expected.

Everything indicates that the central bank will cut interest rates in the near future, and the currency markets estimate a probability of almost 100% of a cut in the next six months.

At 9:15 a.m. (CET), the GBP / USD pair is left 0.1% to the 1.3011 level.