Dollar down after Fed keeps rates frozen

The U.S. Federal Reserve left interest rates unchanged on Thursday amid worries about the global economy, financial market volatility and stubbornly low inflation in the U.S. The Fed did however leave the door open for a hike later this year.

In a press conference, Fed Chair Janet Yellen implied that developments in the global economy led the Fed to not take any action in tightening monetary policy yet.

Yellen spoke of the strong dollar and heightened uncertainty abroad and the impact of falling oil prices on inflation.

The policy statement also nodded squarely to the global economy as a decisive variable within Yellen’s “data-dependent” Fed, warning that recent developments abroad and in financial markets might restrain economic activity somewhat and likely put further downward pressure on inflation in the near term.

In deciding when to hike rates, the Fed repeated it wanted to see “some further improvement in the labor market,” and be “reasonably confident” that inflation will increase.

The dollar fell sharply against a basket of currencies after the release of the statement. Stocks initially edged higher before falling and ending the trading session lower. Prices for U.S. Treasuries rose.

The post Dollar down after Fed keeps rates frozen appeared first on Forex Circles.

Source:: Dollar down after Fed keeps rates frozen

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