USD/CHF jumps to three-month highs after FOMC meeting
|- US Dollar rises after FOMC statement, gains speed during Powell’s press conference.
- USD/CHF heads for the highest close since June 18.
The USD/CHF pair jumped to 0.9979 after the FOMC meeting amid a rally of the US Dollar across the board. The Greenback strengthened amid growing division within the Fed.
Fed cut rates as expected, rising disagreement
The Fed cut interest rates by 25bp as widely expected to 1.75-2.00%. The decision was not unanimous. Esther George and Eric Rosengren again opposed the rate cut while James Bullard wanted a 50bp cut.
According to ING analysts, the Fed “has provided a confused message of upwardly revising its GDP forecast despite being concerned about growth while ignoring the recent pick-up in inflation completely. Moreover, there is no consensus on additional rate cuts being needed.”
Jerome Powell argued that the rate cut was due to developments and insurance against risks. He mentioned since the last meeting they have seen additional weakness abroad and an escalation in trade tensions.
After the decision, US President Trump criticized again the Fed for its policy. He twitted: “Jay Powell and the Federal Reserve Fail Again. No “guts,” no sense, no vision! A terrible communicator!” Recently Trump mentioned they should have negative rates.
USD/CHF holding above critical 0.9950
The post FOMC rally pushed USD/CHF above the key resistance 0.9950 that capped the upside in July and August. A close around current levels (0.9970) would point to a test of the parity level; above the next resistance might be seen at 1.0010.
Now, 0.9950 has become a support level. A slide below would alleviate the bullish tone and could represent another rejection from 0.9950, leaving the pair vulnerable to more losses.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.