USD/JPY spikes to 108.87 and retreats almsot all the way back after Fed cut rates
|- US central bank cut rates for the first time in ten years to 2.00-2.25%.
- Yen drops but then recovers most of the losses; equity prices move lower.
- US Dollar spikes higher but then retreats significantly, still points to the upside.
The USD/JPY pair jumped to 108.87, reaching a fresh daily high after the FOMC released its statement. From the top, the pair pulled back to the previous range between 108.50 and 108.65.
The US Dollar reacted to the upside with modest gains but then pulled back. Still, it was showing some strength despite the retreat. The DXY moved off highs.
The Fed cut the Fed Funds rate by 25 basis points for the first time since the financial crisis. According to analysts, it signaled that it was ready to ease policy further if necessary. The action was justified by uncertainties coming from the global economy and trade tensions. Two FOMC members voted against the rate cut.
Attention turns now to the post-meeting press conference. Analysts will look for more signals about what the Fed could over the next meetings. The greenback awaits Powell trading higher compared to the level it had before the decision but off highs.
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