The US dollar remained extremely volatile following yesterday’s Federal Reserve meeting. The currency was soft at start of today’s session but attempted to rally later. As a result, the greenback was mixed today.
The Fed kept the target range for the federal funds rate at 1.5% to 1.75% as was expected by basically everyone. Some analysts pointed at the word “symmetric” that described inflation goal, interpreting them as a sign that the Fed can tolerate overshooting the inflation target. Moreover, the statement said that the rate of economic activity was “moderate.” Overall, the Fed sounded a bit more dovish than was expected.
Despite that, the outlook for Fed policy remained little changed. CME FedWatch continued to show a 100% chance for a hike in June. Chances for another hike in September fell a bit, but remained at about 70%.
Now, traders wait for tomorrow’s nonfarm payrolls to confirm that the US economy remains strong.
EUR/USD opened at 1.1950, rallied to the high of 1.2009 intraday, and traded at about 1.1975 as of 16:24 GMT today. GBP/USD traded at 1.3565, close to the opening level of 1.3573, following the earlier rally to the high of 1.3630. USD/JPY slumped from 109.82 to 109.10.
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US Dollar Stays Volatile as Traders Speculate About Fed Policy
