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Tomorrow is the time for the FOMC Meeting to reveal what they're going to do with the rates. There's almost a 100% possibility that everything will be unchanged and Yellen would not hike rates. If we look at the market, there are some reasons for Yellen to hike rates another time. Here it is, the reasons for hike rates:
WEAK USD
Against the Euro, the USD is very weak. We have a 15% weaker Usd against Euro from the beginning of the year. This is very important in a Macro way, because all the asset wuoted in USD are now cheaper than the same assets at the beginning of the year. This is a clear advantage for INCREASING the cost of USD in the interbank system.
PUBLIC DEBT
A weaker USD, equals to a weaker debt. So the real value of the 18.000 billion Usd is decreased by 15% against Euro. The debt is a crucial point for FED decision, and a big debt (in real and nominal terms) could be a problem. Now there is no problem about the real value of the debt, and this situation could be perfect for a rate hike tomorrow.
EURUSD EXPECTATIONS
It is not easy to predict that, but the long term trend is LONG and it is bullish to 1,12040-1,2100. Rate hike or non-rate hike, the markets would go where they have to go and all the news about markets are just rumors, nothing else.
WEAK USD
Against the Euro, the USD is very weak. We have a 15% weaker Usd against Euro from the beginning of the year. This is very important in a Macro way, because all the asset wuoted in USD are now cheaper than the same assets at the beginning of the year. This is a clear advantage for INCREASING the cost of USD in the interbank system.
PUBLIC DEBT
A weaker USD, equals to a weaker debt. So the real value of the 18.000 billion Usd is decreased by 15% against Euro. The debt is a crucial point for FED decision, and a big debt (in real and nominal terms) could be a problem. Now there is no problem about the real value of the debt, and this situation could be perfect for a rate hike tomorrow.
EURUSD EXPECTATIONS
It is not easy to predict that, but the long term trend is LONG and it is bullish to 1,12040-1,2100. Rate hike or non-rate hike, the markets would go where they have to go and all the news about markets are just rumors, nothing else.