USD/FOMC – The Federal Reserve raised interest rates by 75 basis points on Wednesday – its single biggest rate increase since 1994. The Fed justified the historic move was necessary to fight inflation but also projected a slowing economy and rising unemployment in the months ahead.
Following an initial uptick in USD, the reserve currency sold off across the board. Explaining USD’s eventual weakness, Wester Union simply stated that “the dollar largely succumbed to the buy the rumor/sell the fact dynamic in the wake of the Fed decision.” While Corpay argues that “ultimately, Powell failed to out-hawk market expectations.” Adding that “traders are piling into currencies issued by central banks that are likely to follow today’s Fed’s hike with aggressive moves of their own.”
Following an initial uptick in USD, the reserve currency sold off across the board. Explaining USD’s eventual weakness, Wester Union simply stated that “the dollar largely succumbed to the buy the rumor/sell the fact dynamic in the wake of the Fed decision.” While Corpay argues that “ultimately, Powell failed to out-hawk market expectations.” Adding that “traders are piling into currencies issued by central banks that are likely to follow today’s Fed’s hike with aggressive moves of their own.”