Hawkish monetary policy of the Fed and the ECB | 29 August 2022

29 August 2022, EUR/USD

Hawkish monetary policy of the Fed and the ECB

EURUSD trading plan:

Jerome Powell gave a short and clear message that rates will stay high for some time, pushing back against the idea of a Federal Reserve pivot that could complicate its war against inflation. Powell wants financial conditions to tighten further and wanted the market to know that the Fed is not ready to declare victory over inflation yet. This is a positive signal for the dollar. Some ECB policy makers want to discuss a three-quarter point interest rate hike next month. ECB is concerned that upward price pressures are becoming entrenched, even as analysts predict an imminent economic downturn for the 19-nation euro zone. This is a positive signal for the European currency.

Investment idea: range 0.9890 – 0.9970.

David Johnson
Analyst of «FreshForex» company
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