- The dollar falls during Powell’s press conference after the Fed’s rate hike.
- EUR/USD returns to its recent range, now looking for 1.0500.
- Wall Street adds gains and Treasury yields fall.
The EUR/USD bounced off near the May low and climbed back above 1.0450. At the end of Powell’s press conference, the pair hovers around 1.0460, almost 70 pips above its pre-FOMC statement level.
A weaker dollar lifted EUR/USD from a four-week low at 1.0357. It has returned to the known weekly range. A break above 1.0500 should reinforce the euro recovery. On the other hand, below 1.0390 a retest of the current year low at 1.0345/50 looks likely.
Fed moves, traders sell the fact
At the end of the June meeting, the Federal Reserve decided to increase its target interest range by 75 basis points, the largest move since 1994. In the statement, the Fed mentioned that more interest rates are coming and warned of raising interest rates. risks of a recession.
Fed Chairman Powell mentioned that he does not expect 75 basis point hikes to be common. He said the pace of rate hikes will depend on data coming in. Inflation developments justify a higher hike at the June meeting, Powell said.
The dollar fell after his comments, while Wall Street indices rose sharply. The Dow Jones rose 1.27% and the Nasdaq gained 2.80%. Yields on US 10-year Treasury bonds fell to 3.33%.
Improved risk sentiment and lower yields in the US pushed the dollar lower across the board. DXY falls 0.70%, the worst day in almost a month. The dollar rally is being discussed at the moment.
Technical levels
Source: Fx Street
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