Forex Marketz Daily Forex News – Fully Markets Update
The dollar fell from its three week high against the Japanese yen this morning during Asian trade hours. The dollar erased gains made after the Federal Reserve rose rates, as expected, and took a more hawkish tone Wednesday afternoon. The Fed signaled that they will raise rates at least two more times this year. Thanks to a strong economic outlook for the U.S. economy.
The dollar’s rally lost steam as traders booked profits. Next up today, is the rate and monetary policy decision for the European Central Bank (ECB). The ECB is likely to discuss the start of winding down its €2.55 trillion bond buying program.
The benchmark USD/JPY Forex market was last trading at 110.20 yen. This is down slightly from yesterday’s close. This market hit a three week high overnight at 110.85 after the Fed’s policy statement.
The benchmark EUR/USD Forex market was trading flat this morning. It was at $1.1797. It recovered from $1.1725. This came after the Federal Reserve’s rate decision. It was also trading near last week’s high at $1.1840.
Dollar and Forex Traders Trade the Latest Fed Policy Statement
As expected the Federal Reserve Board hiked rates. They raised its overnight borrowing cost by a quarter percentage point. This was the second hike this year The Fed funds rate is now between 1.75 and 2.00 percent.
The Fed ended its pledge to keep rates low. It is not needed to support their economy for “some time.” They also signaled they would accept above target inflation through 2020. Policy-makers projected two more rate increases this year. This is up from the one more hike previously.
This afternoon, the ECB is expected to make no rate changes this month. They might start discussing intentions to wind down their bond buying this year. They could also wait thanks to Italy’s political turmoil as well as worse than expected Eurozone economic data.
