Forex: EUR/USD climbed up 300 pips after Fed decision

Wed, Mar 18 2009, 18:48 GMT
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FXstreet.com (Barcelona) - EUR/USD has risen quickly more than 330 pips in the first minutes after the Fed decision of leave unchanged its interest rate at 0.25%. The pair has climbed up from 1.3104 to 1.3436, fresh eight weeks high.

The FOMC statement has announced the decision of the Fed to buy treasuries and to increase the MBS program to 1.25 Trillion Dollars, Market reaction was the rebounded of the risk apetitte

According Nick Nassad, currency market analyst with CMS Forex, this announcement should beneefit most other assets, boosting risk sentiment: "The importance of the Fed's annoucnement is that by buying Treasuries the Fed will to exert pressure designed to lower rates on the many corporate, mortgage and consumer loans linked to benchmark government debt. That will be positive for increasing money supply and boosting lending."

Nick concluded: "I think there the strength we have been seeing in the EUR/USD had a lot to do with the recent rally in global equities as most traders did not expect this statement to buy treasuries to come out of the today's fed meeting."

EUR/USD

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