USD/CHF dives to 0.9925 after a dovish FOMC statement
- The dollar dives to session lows at 0.9925 after the FOMC statement.
- Investors see the bank's rhetoric tilted to the dovish side.
- The bank affirms that policy lags will be observed to decide further rate hikes.
The US dollar depreciated across the board on Wednesday, immediately after the release of the Federal Reserve’s Monetary policy decision. The pair retreated from the 1.000 area to hit session lows at 0.9925 so far.
US dollar suffers as the Fed strikes a dovish tone
The Federal Reserve has met expectations and hiked the Federal Funds rate by 75 basis points, for the fourth consecutive time, to the 3.75% - 4.00% range.
Investors, however, had been focused on the statement, and this has been tilted to the dovish side. The committee affirmed that the pace of future rate hikes will be decided considering “cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
Furthermore, the bank has reaffirmed that interest rate increases will be necessary to return inflation to the 2% level, although they warn about recent indicators pointing to modest growth in spending and production.
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
