Dollar tumbles as Fed signals no rate hike soon

The dollar fell after the Federal Reserve signaled slower interest-rate increases than previously forecast. Although the Fed hinted at a future rise in interest rates, it said it will wait until the US labour market improves.

As widely expected, the FOMC statement the word “patient” in tightening policy but it lowered projections for the benchmark and economic growth.

The dollar was sold off as expectations of early US rate hikes moderated. The greenback has its worst day in 6 years. The euro bounced to $1.1041 from $1.0612 due to this Fed-driven move. However the fundamentals are still bearish for the euro.

US equity markets benefitted and rallied after the Fed indicated it would not raise interest rates soon. Also the Fed signaled that even when the rate hike cycle begins, interest rates will rise at a very slow pace.

The S&P surged 25.14 points, or 1.21%, to close at 2,099.42 while the Dow Jones gained 227.11 points, or 1.27%, to 18.076.19. The Nasdaq was up 45.39 points, or 0.92%, to 4,982.83.

As a result of the weakening dollar, oil firms were some of the day’s biggest winners, after the price of the US oil benchmark (West Texas Crude) jumped 3.9% to $45.16 a barrel. Oil prices in USD becomes more affordable to buyers using foreign currencies.

The post Dollar tumbles as Fed signals no rate hike soon appeared first on Forex Circles.

Source:: Dollar tumbles as Fed signals no rate hike soon

About the Author
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC. Our mission is to maximize the value our clients derive from their most precious commodity, "Time"! By offering advanced and innovative services, optimal customer care and perpetual devotion to our clients, we will ensure that their individual needs are always met as markets continue to evolve over time. Visit ForexTime to learn more [space height="20"] [social type="facebook"][/social] [social type="twitter"][/social] [social type="google-plus"][/social] [social type="youtube"][/social]

Related Posts

Leave a Reply