EUR/USD jumps above 1.2120 as US dollar tumbles after Fed meeting
- EUR/USD rises decisively above 1.2100 to the highest since February.
- US dollar accelerates to the downside after the FOMC meeting.
The EUR/USD jumped to 1.2135 during Powell’s press conference, reaching the highest level since February 26. The pair remains above 1.2120, with the US dollar under pressure after the Fed meeting.
Fed keeps policy unchanged, Powell transitory explanation hits dollar
As expected, the Federal Reserve kept its interest rate near zero and the monthly pace of asset purchases unchanged. In the statement, it mentioned the economy and the labor market have strengthened.
During the press conference, Chair Powell explained that a transitory rise of inflation won’t warrant a rate hike. He said is not the time to start talking about reducing the purchase program.
His comments trigger more losses for the greenback, a rally in Wall Street, and in metals. Even emerging market currencies rose sharply during Powell’s press conference. Volatility remains elevated as the press conference goes on.
Follow our live coverage of the Fed's policy announcements and the market reaction.
US yields initially reacted to the upside after the statement's release and now are at daily lows. The 10-year rose toward 1.66% and then dropped to 1.61%, hitting a fresh daily low. The DXY fell to 90.55, the lowest in almost five weeks.
The EUR/USD heads for the highest daily close in two months, breaking a four-day consolidation range. Above 1.2135, the next resistance might be seen at 1.2150. A correction back below 1.2100 from current levels could point to a reversal, exposing the pair to further losses.
Technical levels