The Euro made a strong run in today’s trading after the US Federal Reserve minutes meeting where they cautioned on raising interest rates.
In the US session directly after the announcement the European currency broke back through the US1.14c market before pulling back in late trade.
The US Fed kept rates on hold in March as most analysts had expected but the minutes meeting showed a divided Fed, with 2 board members calling for a hike in interest rates to starve of a dramatic move later in the year.
The majority of members decided to keep rates on hold last month out of fears of interfering with the recovery of the US economy.
“The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run” the minutes noted.
The target inflation rate for the Fed is 2 percent and although they are close it may still be some way off.
“In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation” they said
“However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data” they added.
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