European Stocks Rise as Markets Await Key U.S. Inflation Data 
BOJ Governor Ueda Highlights Uncertainty Over Future Interest Rate Hikes 
Dollar Slides to Five-Week Low as Asian Stocks Struggle and Markets Bet on Fed Rate Cut 
Asian Currencies Steady as Markets Await Fed Rate Decision; Indian Rupee Hits New Record Low 
Asian Markets Stabilize as Wall Street Rebounds and Rate Concerns Ease 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
Oil Prices Hold Steady as Ukraine Tensions and Fed Cut Expectations Support Market 
The market is now evenly divided in its opinion of a rate hike from the U.S. Federal Reserve. After the Britons voted to exit from the European Union in the June referendum, hike odds for this year declined to 10 percent, however as the financial markets weathered the Brexit storm better than expected, the odds kept rising once more and now recent commentaries from FOMC policymakers have pushed it to 50 percent.
On Tuesday, New York Fed President, who has a permanent vote in the policy meeting, Bill Dudley said that the market is underestimating the possibility of a rate hike from the Fed this year. He also said that a rate hike could come as early as next month. Dennis Lockhart, President of the Atlanta Fed gave a similar signal. In a speech, he said, “if my confidence in the economy proves to be justified, I think at least one increase of the policy rate could be appropriate later this year”.
The dollar, on the other hand, remained relatively weak. It is down more than a percent this week so far. We at FxWirePro believe that even if the Fed goes for a hike this year but the path isn’t upgraded considerably, the dollar would find it difficult to sustain strength. The dollar index is currently trading at 95.
