Home›Forex›Major Pairs›US dollar slips as Fed holds rates despite hawkish spl…

US dollar slips as Fed holds rates despite hawkish split

The Fed left the federal funds target at 3.50% to 3.75% in a 9 to 3 vote, pushing Treasury yields lower and helping EUR/USD rise to about 1.1470.

Reported · Written up by our desk · Major Pairs

The US dollar weakened sharply during the US session after the Federal Reserve left interest rates unchanged, even as three policymakers dissented in favor of a hike. The Federal Open Market Committee maintained the federal funds target range at 3.50% to 3.75% in a divided 9 to 3 vote, with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan preferring a 25 basis point increase, according to FXStreet. FXStreet reported that the Fed said economic activity continues to expand at a solid pace, while inflation remains elevated partly due to energy related supply shocks. The reaction also reflected growing doubts about whether enough officials will support a rate increase at the September meeting. The US Dollar Index (DXY) fell about 0.5% and traded near 100.90. The selloff in the greenback was also linked to lower US Treasury yields, which encouraged broader selling of the dollar. In currency moves cited by FXStreet, EUR/USD advanced about 0.7% to around 1.1470, reaching its highest area in more than a week, while GBP/USD rose about 0.5% to roughly 1.3360 ahead of the Bank of England monetary policy decision. FXStreet added that investors will watch several European releases, including preliminary second quarter GDP figures and July inflation data in Germany, as well as Eurozone economic sentiment and unemployment. It also noted USD/JPY declined about 0.2% to around 163.50 as the broader drop in the dollar supported a modest yen recovery.

Latest closeEUR/USD 1.139 ▼0.1%|USD/JPY 163.85 ▲0.1%|GBP/USD 1.329 ▼0.5%

More like this

Sources