The dollar index, which measures the performance of the US currency against a basket of six major currencies, fell 0.4% to 105.85 units, after previously reaching 106.49, the highest level since April 16. A step above 106.51 would be the highest since early November.
He yen traded stable after falling overnight to its lowest level since alleged intervention by the Japanese authorities Last monday.
The Fed also announced that it will reduce the pace of reduction of its balance sheet starting June 1, allowing only $25 billion in Treasury bonds to be withdrawn per month, compared to the current 60,000 million. Mortgage-backed securities will continue to decline by as much as $35 billion a month.
He euro gained 0.5% to $1.0718 and the pound appreciated 0.3% to $1.2532. He dollar fell 0.3% against the yenuntil the 157.28 yen.
In cryptocurrencies, Bitcoin fell 2% to $58,683.79, having earlier reached $56,483, the lowest level since February 27.
The Fed maintained the monetary policy rate, but warned about the path of inflation
The central bank said, in a statement after its two-day meeting, that “In recent months, there has been no major progress towards the Committee’s 2% inflation target”which was largely in line with what was expected.
Although, its president, Jerome Powellsaid in a press conference that the US central bank’s next monetary policy move is unlikely to be a hikeeasing some concerns about the possibility of the Fed pivoting toward a more hawkish.
Fund futures traders Federal Reserve now foresee a cut of 35 basis points this yearcompared to 29 basis points prior to the central bank’s statement.
“The lack of change in forward guidance (that the next move will be a cut, depending on inflation) was marginally moderate, and I’m not sure the new phrase inserted about lack of progress on inflation is enough to counteract that“, said John Velismacroeconomic and currency strategist at BNY Mellon in New York.
Source: Ambito
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