USD/JPY drops to 6-day lows after Fed meeting
|- US central bank raises rates by 25bp to 1.25-1.50% as expected.
- Projects three rate hikes for 2018.
- US Dollar weakens after the announcement.
- Yellen’s last post-meeting press conference about to start.
The USD/JPY pair dropped after the Federal Reserve decision from 113.00 to 112.66, hitting the lowest since December 7. Then it rebounded modestly but it was holding under 113.00. The weak tone of the US dollar was keeping the pair under pressure.
USD down but not much after Fed
The Fed decided to raise rates 25bp. Two FOMC members (Evans and Kashkari) voted against the decision to tighten. According to updated projections, the median forecast shows three quarter-point hikes during 2018 and two more in 2019. The hike and the projections came as no surprise to market participants.
The US dollar dropped after the announcement probable as some were expecting more hawkish projections. The yen rose against the US dollar but remained mostly unchanged versus its other rivals. The DXY reached a 6-day low at 93.55
Attention now turns to Janet Yellen’s press conference (19:30 GMT). The next post-meeting press conference will be in March, held by Jerome Powell.
Levels to watch
To the downside, immediate support is seen at 112.35 (Dec 5 low), followed by 111.95/112.00 (Dec 6 low) and 111.60/65 (Oct lows). On the upside, resistance levels are now seen at 112.95, 113.20/25 (Dec 11 low) and 113.55 (Dec 13 high).
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.