Global macro overview for 13/09/2016:
The dovish statements from Federal Reserve Governor Lael Brainard yesterday were the final remarks before the FED blackout rule apply today. The FED blackout rule is a policy limit to the extent to which FOMC participants and staff can speak publicly or grant interviews during Federal Reserve blackout periods, which begin on Tuesday of the week preceding a Federal Open Market Committee (FOMC) meeting and end on Thursday following a meeting (the next FOMC meeting starts on 21st September). Brainard in her remarks yesterday mentioned moderate inflation expectations, emerging markets uncertainty, and slow employment growth as the main causes for more cautious FED policy towards an interest rate hike in the near future. In conclusion, her speech was the last one we will hear from any FED policy maker before the FOMC meeting. The current funds rate is 0.50% and according to the CME FedWatch Tool the probability of an interest rate hike to 0.75% is 15% only.
Let's now take a look at the US Dollar index technical picture in the daily time frame. The market keeps bouncing from the golden trend line support around the level of 94.50, but no real rally is being currently initiated. This situation might last for the next week as market participants will wait for the FOMC meeting outcome. The next support is seen at the level of 94.08 and the next resistance is seen at the level of 96.52.
