Is a FED rates hike imminent? What to expect.

According to FOMC minutes, we will likely be seeing a rates hike soon; with the market predicting an 80% chance of rates hike. After the release of the Fed Open Market Committee minutes, which showed an almost inevitable rates hike, the dollar yields were on a decline .Going by the events of the next week’s calendar, the erratic behavior of the dollar is expected to continue.

According to the minutes, inflation and the aggregated spending “received over the intermeeting period were, on balance, weaker than participants expected, they generally saw the outlook for the economy and inflation as little changed and judged that a continued gradual removal of monetary policy accommodation remained appropriate.” Additionally, the minutes seemed to downplay softer inflation metrics, highlighting them as transitory which brings to the fore the importance of next week’s economic calendar. However, even though the market anticipates a June hike, the decision is most likely to be influenced by the Friday’s economic event and specifically the wages growth component.

Policy makers undoubtedly see a rates hike in June after they insinuated need to shrink their already bloated balance sheet by the year-end. This move is likely to dampen growth by lifting long term borrowing costs.

Interestingly, the greenback rallied an average +0.04% against the Yen. The Swiss frank however traded strongly against with the dollar recording a -0.03% slump. The Euro is also strong against the dollar by -0.04% and -0.16 against the British Pound.

On other news, USD/JPY is strangely on an impressive uptrend which may hold, amid the storm blowing against the dollar.

AUD/JPY is however looking rather precarious for binary options trading.AUD/JPY has already moved even further away from the resistance level it has capped all year long. In a nutshell, a serious assault by the Yen is very highly unlikely without a lengthy consolidation and consequently, a push higher. The Aussie on the other hand temporarily unhinged on the China downgrade as investors opted to use the Aussie as a proxy. The move however was all about the plummeting iron ore prices. Iron ore futures have in recent days hit a dry patch even after reports that mainland steelmakers are devising better ways to use scrap and the rise in iron ore inventories at 45 Chinese ports.

Trading USD in binary options

With a number of events slated for next week, trading USD and/or USD currency pairs can be lucrative. Key events to note are the Core PCE price  index and personal spending report for the month of April, on Tuesday, Which are likely to contribute +0.1% and +0.4% respectively. Other important economic events likely to determine the USD trend include USD Pending Home Sales (YoY) and USD ISM Manufacturing report.