Flash: USD weakens across board on FOMC no taper call - BTMU

FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the US dollar has weakened sharply across the board following the unexpected decision by the Federal Reserve yesterday not to begin to taper QE.

Key Quotes

“While it remained a close call over whether the Fed would begin to taper QE, the decision came as a big surprise given that the Fed had signalled no discomfort with the consensus view in the market of likely modest tapering heading into the meeting.”

“The Fed’s decision not to taper is allowing higher risk currencies especially those with elevated current account deficits such as the Turkish lira, Indian rupee, and Indonesian rupiah to most notably extend their recent rebounds against the US dollar. US dollar weakness is proving somewhat more modest against the other major currencies of the euro, pound, yen, and Swiss franc.”

“The dollar index has now reversed almost all of its gains recorded so far in 2013 falling back towards key technical support at around 79.50 which is where the bottom of the upward trend channel from early 2012 is located.”