Regency View:

UPDATE: Fed Preview

There is a strong consensus that the Fed will cut rates again this evening.

Despite cutting rates in July and September, 80% CNBC’s survey respondents expect the Fed to continue to loosen its monetary policy. However, post this evening, consensus over Fed monetary policy begins to diverge with only 37% anticipating a rate cut in December.

It’s well know that the Fed don’t like to cut rates during an election year so these recent rounds of cutting are seen by many as the Feds ‘insurance policy’ against slowing economic growth in 2020.

Looking at the greenback from a technical perspective shows that the market is gearing up for another dollar sell-off. For the last seven sessions the market has been coiling within a small bear flag formation.

Given the risk of heightened volatility during this key economic event we’ve decided not to trade today. We will instead keep our powder dry for tomorrow which should see some follow-through from this evenings newsflow.

Dollar Index Daily Candle Chart