Thursday, October 30, 2014

FED hawkish policy statement gives momentum to U.S. Dollar




FED hawkish policy statement gives momentum to U.S. Dollar

The Federal Reserve Bank surprised the markets with a fairly hawkish policy statement, showing this way its confidence in the U.S. economic recovery. The U.S. Dollar was pushed higher against a basket of currencies despite the fact that the FED reiterated its stance to maintain interest rates low for a “considerable time”.


EUR/USD traded aggressively lower during the post FOMC meeting, trading through its recent tight range and violating the established support levels. The pair is now trading just above 1.2560 as it managed quite easily to break through 1.2650 and 1.26 levels of support. The pair is now looking to challenge 1.25, the two-year low level seen in early October 2014.


 


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Similarly USD/JPY is looking to challenge late September’s high at 110.076 as it has already taken back most of October’s trading losses on the pair and is now trading above 109. The pair which corrected back to 105.56 two-weeks ago, has made a remarkable comeback and it won’t be surprise if it manages to establish a new 6-year high before the end of the month.


Contrary to the U.S. Dollar, the Euro is feeling the pressure from sellers as the common currency is being sold across the board this morning. The Eurozone economy has created concerns in the markets for its weak inflation and lack of growth. This morning German unemployment data will be released at 08:55 GMT, and later this afternoon at 13:00 German inflation data will follow. On the other side of the Atlantic the annualized U.S. 3Q GDP data will be released at 12:30 GMT.


Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.


 






FED hawkish policy statement gives momentum to U.S. Dollar

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