USD Drops After Dovish FOMC

By Unknown

Jumat, 24 Juni 2016

USD Drops After Dovish FOMC

The release of the FOMC statement and economic projections downward pressure on the US dollar. The dollar was lower in all areas compared majors. The statement from the Federal Reserve of the United States has been interpreted by the market as more accommodating than expected. Inflation expectations and business investment remains weak, with the only stand being a strong component of the job. The Fed had been optimistic in 4 signaling rate hikes in 2016 and now forecasts pegged closer have the expectations of 1 or 2 rate increases on the market.

investor confidence in central banks eroded after being crowned saviors of the world economy after the crisis credit. Now a strong communication strategy is key as markets react with wild results if central banks do not grow a clear message forward.

The EUR / USD is trading at € 1.05 and looks set to gain further if the Fed's press conference the President Yellen introduces a possibility of a rise in interest rates in June. commodity currencies were the biggest gainers after the FOMC as oil prices had given them a head start as the freezing of OPEC production, and Russia is closer to reality after a date has been set for a summit in April.

The Fed aggressively lowered their outlook after a hike in December. The USD is no support from the rhetoric of the central bank as the US central bank will only increase the interest rate gradually in 2016, citing macroeconomic headwinds abroad.

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