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Dollar still looks heavier as Fed decisions and press conference in focus

So, today the markets expect a very interesting trading day. Wednesday December 19, 2018 has a chance to become the last volatile trading day of the year. Markets have been concentrating all week waiting for the outcome of American regulator meeting, which will be announced today at the American session. Federal Reserve will almost certainly raise interest rates by a quarter of a point for the fourth time this year. Fed Chairman Jerome Powell will hold a press conference, which will be held after 30 minutes once the final Fed statement published.

Finally, we will learn the Fed's 2019  forecasts for the US economy, as well as the regulator’s decisions on the rate hike. The intrigue persists in another respect; over the past six months, the markets have formed an opinion that in 2019 the monetary actions of the American regulator will be quite aggressive. However, recent weeks have displayed that the regulator is close to completion of the aggressive-monetary police as rate levels are allegedly close to neutral values. On this background, the US dollar is trading under pressure throughout the week. Yesterday, USD dollar index updated four-week lows around 96.15 mark. On Tuesday, US stock markets were able to show a weakly positive trading session, thereby somewhat recovering after Monday's losses, when stocks fell by more than two percent.

To other news that also remain in the focus of the market. US and China held talks at the deputy ministerial level to discuss current trade disputes as they approach the January meeting. Italy managed to agree on a budget for 2019 with the European Commission. This was previously reported by Italian Ministry of Finance.

Futures on US indices indicate a positive start to trading in the US market, while futures on the DOW index indicate a strong opening, as signs of progress in the trade dispute between the US and China will support the US market.

As for commodities, oil prices attempted to rebound from the 2017 lows after one of the largest falls in recent years occurred at the last session. Yesterday, Brent crude lost by five percent.

On FOREX, European currency has reached highs  in the last seven trading days. EUR / USD pair has gained to the upper level of the wide sideway range  1.1405. The British currency is trading near an important support level, 1.2660. The gold market in Asian trading marked a new local maximum in the area of 1251, but the market failed to consolidate at these levels.

Prior to the release of Fed data, traders will probably be cautious in the action, and for the most part will ignore today's statistics on US secondary housing market. Major price action will begin in the middle of the US trading session.

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