FX.co ★ Demand for dollar will ease as soon as sell-offs in markets halt

It seems that the sell-offs in markets are coming to an end because of the upcoming Fed meeting next week. Investors are taking a wait-and-see attitude because earlier, Fed Chairman Jerome Powell hinted that there may be an increase in interest rates by 0.50% instead of 0.25%, as was done at the previous meetings. Looking at the markets closely, a rebound is already brewing, along with a local decrease in dollar demand. However, this is unlikely to shift the trend from bearish to bullish because a lot depends on whether the Fed really raise rates by 0.50%. If the central bank does decide to hike rates more actively at the next meetings, then there will be a strong rally in stock indices and decrease in USD. But if Powell makes it clear that an increase is temporary and will run only until inflation stops and turns down, then there will be a new wave of sell-offs in markets and increase in USD.Today, the focus of the markets will be the preliminary data on US GDP for the 1st quarter, which should show a strong slowdown in economic growth from 6.9% to 1.1%. If the actual figure is worse than that, then stocks will fall further because it is a signal that the US is moving towards a recession. The rate of dollar will also be affected.