• Kiwi loses strength at 0.5940 and returns to previous levels at 0.5860.
• US dollar rally supported by hawkish comments from Fed Powell.
• A dovish FOMC statement sent the dollar lower.

The dollar has lost ground taken in the immediate aftermath of the FOMC decision release, with the US dollar rallying, following Fed Chairman Powell’s comments in the release.

Investors punished the US dollar following the release of the FOMC statement, sending the kiwi to five-week highs at 0.5940, before returning to previous levels in the middle of the 0.5800 range as Powell’s statement progressed. .

The dollar rebounds after Powell’s Fed comments

The dollar has rebounded strongly as Fed Chairman Jerome Powell has adopted a more dovish stance to offset the negative impact of a dovish monetary policy statement.

Jerome Powell has denied the idea that the entity has excessively tightened its monetary policy and has assured that the economic data suggest that “we could reach higher levels than we anticipated at the September meeting“, which has relaxed expectations of a moderate pivot in December.

As for the next meeting, Powell said no decision has been made yet and the time to slow down rates could be as early as December or at the February meeting.

Earlier, the dollar fell against its main rivals, after the FOMC statement stated that the pace of future rate hikes will be decided taking into account “the adjustment accumulated monetary policyariathe lags with which monetary policy affects economic activity and inflation, and economic and financial developments. “

Technical levels to watch