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Euro jumps on Fed speech
Published on 16.03.2016 23:12

The European currency has jumped during the American session today after the latest interest rate decision out of America and a dovish statement from the US Federal Reserve sent the US dollar reeling against major currencies.

At 8.58pm (GMT) the Euro was trading at US$112.28 after touching a low of US$1.1057 earlier in the day.

The US FED in their latest meeting, decided to leave rates unchanged at 0.5 percent after lifting them in December which was widely anticipated by the market.

The highlight of the trading session was the following monetary speech after the interest rate announcement, where they noted that the amount of rate hikes this year would be significantly less than they had mentioned at their previous meeting.

Lower than expected inflation, and growth now expected at 2.1 percent, falling from a previous number of 2.3 percent has the Fed now predicting that the amount of interest rate hike this year will be 2 instead of 4 which they had planned to do at the start of the year.

 Although the tone of the statement was pretty dovish this time around, they noted that they will take a wait and see approach with possible adjustments in economic policy should the situation improve.  

Some analysts took that as a warning that the Fed’s mind could change at any time and that just 2 rate hikes this year was far from certain

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Andrew Masters


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