The main focus this week was the monetary policy meeting of the Federal Reserve. It indeed had a noticeable impact on the Forex market but not necessarily in a way that most market participants have expected.
It was expected that the Fed would reduce its monthly asset purchases by another $10 billion and this would bring the dollar higher. The US central bank indeed cut stimulus as was expected but also revised its growth forecast for this year down and signaled that interest rates should remain low for a long time. This, coupled with the negative revision of the US growth outlook from the International Monetary Fund, left the greenback extremely weak.
As for other central banks, they did not hurt their respective currencies much. While policy minutes of the Bank of England were a bit more dovish than was expected, they also showed a gradual change of stance among British policy makers, who now looks more favorably on the idea of monetary tightening in a near future. The Swiss National Bank still wants to bring the franc down, yet the Swissie rallied ignoring all attempts from the SNB to prevent this.
EUR/USD rallied from 1.3540 to 1.3597, reaching the high of 1.3643 during the week. GBP/USD went up from 1.6972 to 1.7015, while its weekly high of 1.7063 was the strongest price since October 2008. USD/CHF dropped from 0.8994 to 0.8954.
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