Market Opportunities : Week 12-12-2022 - 16-12-2022

USDIDX: Federal Reserve interest rate decision is the key event in the December 12-16 week. Fed chair Jerome Powell will hold a conference on December 14. He said last week that the central bank may slow the pace of rate hikes starting at its December 13-14 meeting while the rates may need to go up higher than thought before. And strong November jobs report and expansion of activities in services sector spurred some speculation whether the Fed will raise rates by just 50 basis points or hike by another 75 basis points at its December meeting. Majority of traders expect a 50 basis points increase in the benchmark rate and a hawkish stance by majority of policymakers’ for further aggressive rate hikes will give the USDIDX a bullish boost.

EURUSD: European Central Bank interest rate decision is a major economic event in the December 12-16 week. European Central Bank will hold its conference on December 15. ECB has said it plans to raise rates to bring inflation back to its target rate of just above 2% and the chair of France’s central bank recently said he favored a 50 basis point rate hike at December meeting. In case the ECB actually raises interest rates by 75 basis points instead of 50 basis points - the EURUSD will get a bullish boost.