The AUDUSD opened at 0.7012 (mid-rate), and the NZDUSD opened at 0.6621 (mid-rate) this morning.
As widely anticipated the Federal Reserve maintained the target range for the federal funds rate at 2.25 to 2.50 for the third consecutive meeting, commenting that there was no strong case to move rates in either direction."
In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the FOMC said in its statement.
Although the Fed acknowledged both headline and core inflation for Q1 came in unexpectedly low, data since the March meeting shows economic activity rising at a solid pace. The decision not to move rates comes a day after President Donald Trump took to Twitter to urge the Fed to cut rates by 1%, claiming that the economy would go “up like a rocket” if the central bank stopped unwinding its balance sheet in a process called “quantitative tightening.”
The USD which was initially trading lower following the statement turned positive during the post statement press conference after Fed Chair Powell indicated that the Fed are confident that inflation will push up towards their 2% target rate saying, "We suspect that some transitory factors may be at work. Thus, our baseline view remains that with a strong job market and continued growth, inflation will return to 2% over time."
Prior to this morning’s announcement the market had been pricing in 47bps of rate cuts over the next 12 months, this has now been reduced to 33bps of cuts.
Global equity markets remain mixed, - Dow +0.19%, S&P 500 +0.18%, FTSE -0.44%, DAX +0.13%, CAC +0.10%, Nikkei Closed, Shanghai +0.52%. Gold prices are trading lower, down 1.4% trading at $1,273 an ounce. WTI Crude Oil prices are marginally lower, down 0.2% Trading at $63.76 a barrel.
Our MarketWatch page is live, please click here to access.
Get in touch with us for more information or pricing.
Would you like daily international currency market news and insights delivered to directly to your inbox? Sign up to our country-specific updates below, and please browse the rest of our blog for more insights from XE offices around the globe.
The information, materials, accompanying literature and documentation available on our internet site is for information purposes only and is not intended as a solicitation for funds or a recommendation to trade. XE, its officers, employees and representatives accept no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.
While we take reasonable care to keep the information on the website accurate and up to date, there may be occasions when this is not possible. Case Studies and articles are not intended to predict future moves in exchange rates or constitute advice.
XE makes no representations, warranties, or assurances as to the accuracy or completeness of any information derived from third party sources. If you are in any doubt as to the suitability of any foreign exchange product that you are intending to purchase from XE, we recommend that you seek independent financial advice first.
For more information about XE, please click here: Regulatory Information