USD is still on its strengthening trend. The cause is Federal Reserve that is maintaining the unchanged interest rate policy. They continue to make the potential reduction in bond purchase is smaller and faster than many people expected. It is so interesting to be highlighted.

In the market, the US dollar index shows its strengthening position. Based on that data, you could note that this main currency rises for about 0.55% and becomes 90.65. The Federal open market committee made a decision that they will maintain the referred interest rate.

The value is 0% up to 0.25. Furthermore, they will also maintain the monthly bond buying rate. The amount is quite big. It reaches $120 billion. This decision was taken based on several consideration made by the Fed and the real situation in the market.

Economic condition is still far from the inflation target

Based on the statement from the Fed’s leader, the economic situation is still far from the inflation target which is made by the organization. That is why; it may takes more time to reach a further substantial progress. That is quite reasonable..

The Fed’s chairman is also not too worried about the risk. It is especially about the possibility that the central bank can reduce everything faster than it is expected. This situation is happened amidst the expectation of rising inflation after the pandemic 

It seems that the organization will take the wait and see approach. That is recommended for a potential of the rising inflation after pandemic. He thought that this condition will be proven for a while. That is what Powell said to people.

The reaction taken by Dollar due to the Fed’s decision is happened ahead of the America’s fourth-quarter GDP. That is scheduled to be released this day. Many market participants sure that these things could deliver a further information. It will show the direction.

The Data about GDP

The consensus for GDP increases for about 4.1%. Meanwhile, the Atlanta data for now is showing an increase. It is 7.5% stronger. That progress is stated by the National Australia Bank. They also inform several predictions that have been made based on certain condition.

Enter this 2021 era, the growth of Q1 can be weakening based on the new lockdown. It is known that the coronavirus pandemic has not been finished yet. The good thing is that some vaccine products have been found and injected in many countries.

When vaccine shows its effectiveness and lockdown is reduced, the economic growth is predicted will be increasing sharply. It is a good sign for the global market. The commodities and currencies may have their best movement. The condition could be normal again.

Nowadays, dollar is helped by the decrease of EUR / USD. You know that this pair has the significant position for the USD index. That is happened in the middle of a report which recommends that market must be under the possibility made by Central Bank.

Interest Rate still becomes a Concern

The possibility made by the Central Bank relates to the interest rate factor. That institution may decrease the rate until under zero. Most of the market participants agree that those are the biggest possibility so far. Market must be ready for that.

Bloomberg quoted from the anonymous ECB official about one thing. That source said that market seems underestimate the possibility of further cuts. It is especially to the deposit of interest rate for about – 0.5%. The data is still highlighted.

Meanwhile, there is also an update that the USA economic is now slower. The jobless claim is also decreasing and it becomes 847000 people. The cause is the third wave of coronavirus pandemic. In that country, the positivity rate is still high