When you make a forecast, you need to consider the percentage of bank statements in the central bank's monetary policy.
These statements define the tone of the long-term currencies with the fluctuations of the given prices per day and the adjustment of the volatility according to the main trend creates a new risk.
Apart from that, I will now review the monetary policy statement of the largest economy and tell you how it will affect the foreign exchange market.
The US Federal Reserve has continued to influence the US dollar interest rate since 2018. The interest rate has been raised four times recently. It is helpful to push the dollar to new highs against a basket of currencies this year.
The dollar showed some volatility. The interest rate was not as stable as expected. The performance over the past ten years has reached a multi-year high of 3.25%. It contributed to the dollar's rise, but this yield fell to 2.75%.
Last year, the Fed raised interest rates in a healthy economy. The central bank has indicated in its recent monetary policy statement that a further rate hike will be suspended in 2019. This will only happen when economic data confirms this.
Current price trends do not raise Federal Reserve rates. If this assessment is correct, trading will continue with a benchmark of 2.75%. The US dollar-dominated forex currency pairs. But it is important that you learn the basics of forex before you try your luck.
New Zealand dollars
In the monetary policy statement issued last November, the Reserve Bank of New Zealand maintained its official cadastral rate at a constant rate of 1.75%. The governor of the RBNZ, Orr, said the central bank intends to maintain it this year.
The OCR will reach an expansionary level over a longer period of time, helping to maximize sustainable employment and maintain low and stable inflation.
There are risks associated with growth and inflation protection. The timing and direction of the movement depend on the data. Large-scale consumers will stay below 2% in the medium term. The need to continue a supportive monetary policy.
The political meeting, the price of oil, lowered US Treasury yields. They fell with the stock prices. New Zealand's GDP was below expectations. Nevertheless, it is a portable market for forex traders.
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The Reserve Bank of Australia kept its key interest rate at 1.5%. It is a historic low point.
The low level of interest continues to support the Australian economy. The continuation of the process reduces unemployment and the goal of return of inflation is expected.
The process is slow, but they take all available information. The jury judging this decision did not change their position.
The meeting aimed for sustainable growth and reached the corresponding inflation target. Inflation has remained stable and weak.
Initiation to the CPI was 1.9, but in essence it rose to 1.75%. We do not know how that will change in the future, but it will remain positive in 2019 as well.
The RBA is somewhat optimistic about rising inflation. Consumer spending and the weak real estate sector will limit the interest rate. If the RBA does not move, this is a rate cut.
Japanese politicians disagree on the possibility of allowing bond yields. It will go to the goal of zero percent. This will reflect the disagreement within the Board on how to deal with the growing difficulties of continued easing.
Policy makers have predicted a collapse and we see the results now. Efforts are being made to make the Japanese yen attractive, but USD / JPY is not the right pair as before.
So this was some information about how the world's largest economies will affect the Forex market. Do you find it helpful?