- The Federal Reserve keeps rates and bond purchases stable as expected.
- The dollar extends the slide across the board, even as US yields are stable.
The USD/JPY it remained below the highs after the release of the FOMC statement. The pair initially rose to 108.99 and then fell to 108.79 as the US dollar weakened across the board.
The Fed just improved its view of the economy
In the statement issued today at the end of the two-day FOMC meeting, the Fed kept interest rates and the buy program unchanged, as expected. The central bank offered no indication of a slowdown in the pace of its asset purchases.
Analysts at Capital Economics note that “while adopting a more optimistic tone on the economic outlook and acknowledging that inflation has risen, the Fed offered no indication that it was considering slowing down the pace of its asset purchases, and much less thinking about raising interest rates. “
After the statement, US yields touched new weekly highs, with the 10-year yield at 1.66%, but then fell back to the pre-event level. The dollar also reacted positively, but only for a few minutes. After the initial momentum, the USD turned lower again, resuming the slide and hitting new lows across the board, with EUR / USD climbing above 1.2100.
USD / JPY hovers around 108.80 as market participants await Fed Chairman Jerome Powell’s press conference. The pair is still in positive territory during the day, away from the highs and at the mercy of bond yields.
Technical levels
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