US Dollar Slips Ahead Of FOMC
The Dollar Index touched the intraday low of 95.76 after the Federal Open Market Committee (FOMC) announcement of keeping the rates unchanged. Earlier in the day, USD Index computing the greenback against the six major rival currencies touched new peaks drifting near 96.50 during the morning trading session.
The Committee maintained the target range for the federal funds rate at 2-1/4 to 2-1/2 percent. Market participants were expecting unchanged interest rates. The reason for having a sudden selling pressure in USD Index was due to unexpected information. The surprising factor was of having more than anticipated dovish stance in policy statement and projections. The GDP growth forecasts were revised downwards slightly for the year 2019 and 2020. The unemployment rate was also expected to slightly higher.
In the post-FOMC press conference, Jerome Powell , Chair of the Federal Reserve commented that Budget Deficits Still Matter - "Deficits matter… it's not controversial," Mr. Powell said. "I'd like to see a greater focus on that over time," adding that he didn't see the issue as something leading to an immediate problem. "It's not in the nature of a near-term debt crisis or anything like that."
EUR/USD Skyrocketed Under A Weak USD
The EUR/USD which was drifting near 1.1350 level before the FOMC release upshot to 1.1414 level post meeting. With the interest rates maintained at the same levels as per the FOMC statement, USD Index slumped heavily. The Equity prices were seen to rise while US Yields were down. The pair decisively crossed its March month's highest level.
USD/JPY Dragged Down Post FOMC
Today, the USD/JPY pair wiped the losses which it made in the Tuesday's trading session. The USD/JPY pair touched a 5-day high level of 111.7, and laterwards it started to consolidate amidst major FOMC announcements to come. The pair lost more than 50 pips following the FOMC meeting release. USD tumbled while Yen escalated. The 10-year yield had declined to reach 2.56 percent. This was the lowest since January which helped USD/JPY to plunge more.
The government of Japan had reduced the outlook numbers for the economy in its March report after three years. The manufacturing and the export sectors produced the weakest numbers according to the report. The yen remained silent again but can violate with some impactful news coming out of the US-China trade talks.
USD/CAD Drops From Peak With High Crude Prices
WTI price shot up reaching a 4-month high of $59.55. The global sluggish economic growth and crude supply cut added extra elevation to the commodity price. As per the latest decision by the OPEC, the scheduled April meeting was postponed to more than until June. Last day, API had released its weekly crude inventory report which came out to be a draw and market expected an addition to the crude stock.
The Canadian Government announced its budget for the year 2019 but seemed to have less impact on the loonie.
AUD/USD Pushes Upward With Rates Unchanged
Following the Fed's confirmation to keep rates the same as previous helped the AUD/USD to soar. The pair badly tumbled earlier the day after the release of the speech by Reserve Bank of Australia ( RBA ) Assist Governor Bullock. The impacting part of the statement was regarding the lowered Sydney home prices and iron ore futures. The commodity price slipped after Vale was allowed to reopen one of its major iron ore mines in Brazil. Following this news, the pair dropped below to 0.7057 level after that the upward movement was pretty steady.
This article was originally posted on FX Empire
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