The Dollar falls before the FED’s announcement

The Dollar has been retracing for today after a report from the Wall Street Journal suggested that the FED may use the words “considerable time” when referring to a possible interest rate hike. Investors and traders have been waiting for the FED to announce that interest rates may rise sooner than expected, but with today’s speculation traders prefer to close their Dollar positions just in case the unexpected happens.

If the FED hints at a possible rate hike by next year, the Dollar may go back to its bullish trend and more losses could be seen on the EUR/USD, which has been supported, not by Euro Zone fundamentals, but by weakness on the greenback. We do not know for sure what kind of language is Yellen going to use, that is why the best thing to do is to stay on the sidelines until the statement is released.