Analyst: The core of the Federal Reserve's interest rate meeting is not about the rate decision; the US Dollar Index at 99.50 is seen as a critical "watershed" point

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Jinse Finance reports that on June 18, analyst Matthew Weller believes that Federal Reserve Chair Kevin Worsh’s first Fed meeting is expected to keep interest rates unchanged, but the Summary of Economic Projections (SEP), the “dot plot,” and the contents of the press conference could significantly reshape market expectations for the future interest-rate path. Traders and economists generally expect the Fed to keep rates in the 3.50% to 3.75% range. Worsh’s answers at the press conference regarding central bank independence and its communication strategy are expected to have a more enduring impact on the market. The U.S. dollar index DXY at 99.50 is seen as a key “watershed,” potentially determining the dollar’s technical trend for this week and for the longer term. If the Fed keeps the door open to rate hikes later this year and Worsh emphasizes FOMC independence, the dollar index could quickly rebound to around 100.50, near a more-than-one-year high; however, the FOMC’s more cautious forecasts and the new chair’s ambiguous remarks on central bank independence issues could put pressure on the dollar. A break below 99.50 would quickly bring the 50-day moving average toward 99.00.
USIDX0.35%
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