19 Sep 2013
Session Recap: The Fed closes the door to taper; the USD is crushed
FXstreet.com (San Francisco) - So, now do you believe for sure the Fed won't start its tapering in the short term? After a long awaited, the Federal Reserve surprised market and it didn't deliver the bond buying program cuts. Then the Dollar was crushed while the US stocks, oil and gold rocketed.
As summary, Bernanke said no taper in the rest of his term and the rates will be at minimums for at least two more years as he affirmed that the unemployment rate must be considerable below 6.5% to think about hike rates. The Fed expects jobless rate to move in between 6.5%-6.8% range in 2014 and 5.8%-6.2% in 2015.
So the Dollar was hurt and collapsed against its major rivals. The EUR/USD rallied to trade above the 1.3500 and to reach levels not seen since February 8th at 1.3540. "Intraday charts present strong overbought readings," comments FXstreet.com's Chief Analyst Valeria Bednarik. "But the strong break above 1.3450, past August high, favors an upward continuation in the short and the longer term."
The GBP/USD rocketed to crush the 1.6100 area and reach fresh 9-month highs at 1.6161. The Fed decision and the BoE’s confidence in the UK recovery are fueling the Cable. The USD/JPY broke the 98.45 strong support and felt to 97.75, September lowest price. The USD/CAD tumbled to test the 1.0200 and the USD/CHF priced around the 0.9110.
The Aussie confirmed its uptrend after breaking the 0.9400 area and rallied to 0.9525 1-month high. The gold recovery all the past week loses and currently it is testing the 1,360 key area.
More to come in the currency market. Just remember that historically the USD major movements on Federal Reserve decisions come in the day after.
Main headlines in the American session
US: Building Permits fell to 918K in August
Italy's balanced budget target to be delayed until 2014
The Fed decides to maintain the status quo; No taper
Wall Street rockets on Fed's no-taper decision
As summary, Bernanke said no taper in the rest of his term and the rates will be at minimums for at least two more years as he affirmed that the unemployment rate must be considerable below 6.5% to think about hike rates. The Fed expects jobless rate to move in between 6.5%-6.8% range in 2014 and 5.8%-6.2% in 2015.
So the Dollar was hurt and collapsed against its major rivals. The EUR/USD rallied to trade above the 1.3500 and to reach levels not seen since February 8th at 1.3540. "Intraday charts present strong overbought readings," comments FXstreet.com's Chief Analyst Valeria Bednarik. "But the strong break above 1.3450, past August high, favors an upward continuation in the short and the longer term."
The GBP/USD rocketed to crush the 1.6100 area and reach fresh 9-month highs at 1.6161. The Fed decision and the BoE’s confidence in the UK recovery are fueling the Cable. The USD/JPY broke the 98.45 strong support and felt to 97.75, September lowest price. The USD/CAD tumbled to test the 1.0200 and the USD/CHF priced around the 0.9110.
The Aussie confirmed its uptrend after breaking the 0.9400 area and rallied to 0.9525 1-month high. The gold recovery all the past week loses and currently it is testing the 1,360 key area.
More to come in the currency market. Just remember that historically the USD major movements on Federal Reserve decisions come in the day after.
Main headlines in the American session
US: Building Permits fell to 918K in August
Italy's balanced budget target to be delayed until 2014
The Fed decides to maintain the status quo; No taper
Wall Street rockets on Fed's no-taper decision