13 December 2022 | Other

MUFG Bank: inflation data and FOMC meeting can cause an increase in the dollar at the end of the year

This week will be crucial for the dollar’s dynamics till the end of the year. The last CPI report in the States will be released, and the last FOMC meeting of this year will be held. Economists at MUFG Bank admit that the dollar is likely to trade in short positions next week.

Market participants wait for a signal confirming that the underlying inflation pressures will continue to weaken. This should decrease the dollar convertibility at the end of the year. In this case, a sharp increase in inflation can provoke an even stronger market reaction after the recent dollar’s weakening. 

The Fed made it clear that it will increase the rate by 50 and not by 75 basis points. The dollar’s dynamics will depend on two factors. The first one is information from Chair Powell about the rate increase slowing at the next FOMC meeting. This can cause an American currency decline. Another factor is the Fed report on the rate increase to the new high above 5.0%. Such an increase should happen in 2023 and last till 2024, creating upside risk for the dollar.   



Company MarketCheese
Period: 22.04.2025 Expectation: 800 pips
USDCAD to rise from new support at 1.38200
Yesterday at 11:39 AM 30
Period: 26.04.2025 Expectation: 3909 pips
GBPUSD technical correction opens up selling opportunities with 1.288 target
Yesterday at 11:13 AM 25
Elizabeth_Kuzmicheva
Elizabeth_Kuzmicheva

Listed among the best MarketCheese authors
1st in the segment "Metals"
Period: 24.04.2025 Expectation: 150 pips
Brent crude poised to rebound to $69
Yesterday at 10:55 AM 25
Period: 22.04.2025 Expectation: 1495 pips
AUDCAD set to enter fifth wave of growth
Yesterday at 08:29 AM 33
Period: 23.04.2025 Expectation: 2500 pips
Rebound to 145 could interrupt USDJPY decline
17 April 2025 66
AntonVolkov
AntonVolkov

Listed among the best MarketCheese authors
1st in the segment "Currencies"
Period: 21.04.2025 Expectation: 600 pips
AUDUSD rebounds from 0.64000 resistance level
17 April 2025 38
Go to forecasts