Business
Fed Decision Could Test Dollar’s Resilience to Lower Oil Prices
The Federal Reserve’s policy decision at could test the dollar’s resilience to lower oil prices after the U.S. and Iran agreed an interim peace deal, ING’s Francesco Pesole said in a note.
The dollar needs confirmation that policymakers, especially new Fed Chairman Kevin Warsh, are open to raising rates in future even if rates are held steady Wednesday, he said.
“If Warsh or the broader Federal Open Market Committee signal a stance that is clearly at odds with market pricing, the dollar would sell off sharply.” However, removing the policy easing bias should be enough to support the currency, he said.
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