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EURUSD – Suffering from the double-edged message of the FED



EURUSD, Like many assets, the Fed meeting had mixed reactions. Indeed, the US Central Bank’s statement sent the pair surging to a high of 0.9976 before falling during Jerome Powell’s press conference to hit a low of 0.9810. This double-edged message sent EURUSD volatility skyrocketing. The pair has been trending lower, and is currently holding north of  0.9750 support.

The American Central Bank has indicated that they are preparing for a slowdown in interest rates. This depreciation of US Dollar has been automatically taken as a clear signal in favor a rise of EURUSD.

However, during Fed Chair Jerome Powell’s press conference, EURUSD reversed its gains and more. Indeed, the Governor of the Central Bank has repeatedly declared that inflation is too high, emphasizing that price stability is essential to the American economy and reaffirming that the FED will maintain its current position “until the job is done”.

More importantly, he said “the ultimate level” of benchmark policy rates will be higher than previously estimated. Some experts believe that this data could increase the final interest rates above 5% and drive the USD higher and EURUSD lower. (See below)

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