The 24-Hour Drama of Central Bank and Their Influence on Currencies!

The dollar fell to a four-month low after America’s Central Bank, the Federal Reserve said in new economic forecasts that it was done raising US interest rates and that borrowing costs would fall in 2024.

The Central Bank of USA left interest rates unchanged at 5.50 percent. His third meeting, mostly as expected. And the base rate should be lower until the end of 2024, with the median forecast cutting the rate by three-quarters of a percentage point from the current 5.25 percent to 5.50 percent.

The US dollar index fell to 102.89, down 0.83% on the day and the lowest level since November 30. The dollar index fell to a low of 102.430, the lowest level since August 2023.

Technical Outlook – What’s the Impact After the Central Bank Policy?

Yesterday it weakened 0.88% to 102.9050. On the above chart, it is trading at the very important level of 102.40. A break below will soon open the  next support at 101.80-101.30. Alternatively, immediate resistance above is  102.9850-103.55. The general trend is still negative.

ECB Meeting later today

EUR/INR rose 0.35% to 90.9890, its highest since December 1. The currency pair is on track for its biggest one-day percentage gain of the month.

Later today, the European Central Bank (ECB) also announces its interest rate decision. It is expected to remain unchanged at 4.50%.

 ECB meeting and updated economic forecasts. From this point of departure, the biggest outcome of the meeting will be the updated economic forecasts and rhetoric of the ECB.

 The market is still pricing in an ECB tapering in 2024, so it will be interesting to see how big the difference is compared to central banks’ forecasts. On the chart above, EUR/INR is trading with huge resistance at 90.9750.

 There is a decent traction belt around the area which could potentially further limit the climb. However, a bullish move above this mark could trigger further gains, with the next resistance seen soon at 91.40-92.00. Alternatively, the pair may pull back to 90.65-90.2025.

BOE Policy Meeting later today

 GBP/INR rose 0.32%, supported by a weaker US dollar and post-meeting comments from the US Federal Reserve (Fed). Now the BoE interest rate decision gives direction.

The Bank of England will publish this policy, later today. The BOE is widely expected to hold interest rates at 5.25 percent. The BoE’s announcement in the policy statement will be closely watched as both the Fed and the BoE begin cutting interest rates in 2024.

The next direction for the pound depends on the outlook for the central bank and BoE policy, but volatility is expected to remain strong. On the chart above, prices hit a huge resistance at the 105.4025 level, suggesting that the uptrend may be blocked.

However, a break above the 105.4025 pair could test 105.8820-106.3025. Alternatively, a failure to break out could lead to a correction to 104.9050-104.3850.

Commodity Samachar
Learn and Trade with Ease

Also Read: All Roads Lead to the US: What’s the Future of the US leading up to the Fed meeting? , Crude Oil News: Price Hit Five Months Low- How Will The Fed Impact Inventory?

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