EURUSD is rising quickly. Overview for 19.12.2018

The major currency pair continues growing on Wednesday afternoon; investors are waiting for the results of the US Federal Reserve meeting.

EURUSD is keeping positive momentum in the middle of the week. The current quote for the instrument is 1.1400.

The key highlight is still the two-day US Federal Reserve meeting, which is set to be over today. This is the last meeting of the American regulator in 2018. Investors are very nervous and here’s the reason why. 

First of all, according to what was announced earlier, the Federal Reserve is expected to add another 0.25% to the current rate value and make it 2.25-2.50%. This would be the fourth hike this year and investors are afraid that it might be too much. The US President Donald Trump tweeted the same idea earlier this week. In characteristically bellicose language of his, Trump wrote that “it is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!” It wasn’t the first time Trump attempted to put pressure on the Federal Reserve, but the regulator managed to follow its monetary strategy so far. 

Investors are worrying that the American economy may slow down in case of a new rate hike. 

Secondly, the speech to be delivered by the Federal Reserve Chairman Jerome Powell after the meeting will be very important. It’s interesting to watch whether Powell can manage the pressure from Trump or be specific about the rate hikes in 2019. The regulator is thought ta make a pause for 2-3 months. However, if the FOMC signals to continue tightening its monetary policy, investors will start selling more actively.

The USD has been handling the pressure quite well so far, but may plummet in case the Federal Reserve is aggressive and tough about the economy and finances tonight.