US Dollar is pressured by a dovish Federal Reserve rate hike.
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- US Dollar is pressured by a dovish Federal Reserve rate hike.
- Bears are in the market as the US yields sink during Fed Powell´s presser.
The US Dollar is under pressure while traders price out the Federal Reserve´s hawkish stance due to a dovish rate hike of just 25 basis points. Additionally, traders are moving out of the greenback due to less hawkish language in the Federal Open Market committee´s statement and forward guidance from Federal Reserve´s Jerome Powell during his presser.
Before today´s Federal Reserve event, markets were pricing in a year-end target rate of 4.36%. This has dropped in volatile reactions to the statement to 4.26%. At the time of writing, US 2-year Treasury yields are down to 4.77%, dropping from 4.259% on the day to print a low of 3.958%. Consequently, the US Dollar index, DXY, fell to a low of 102.065 from a high of 103.265.
Meanwhile, Federal Reserve chairman Jerome Powell is speaking to the press in an event that started at 18.30GMT.
Powell speech: Recent banking events will result in tighter credit conditions
Powell speech: Before banking stress, thought we would have to raise terminal rate
Powell speech: Tightening in credit conditions may mean monetary tightening has less work to do
´´If we need to raise rates higher we will, for now we see likely hood of credit tightening.´´
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