Dollar Dips After Fed Refrains from Action

The US dollar slumped against its major peers after today’s policy announcement of the Federal Reserve. Not only the US central bank kept interest rates unchanged, but it also released a statement that was considered rather dovish by economists and market participants.
The Fed said that it “is monitoring developments abroad,” likely referring to the recent crash of global stocks. The statement also revealed that policy makers monitor inflation closely, and yesterday’s report showed that the United States actually experienced deflation. And on top of that, the Fed revised most of its economic projections down.
Fed Chairwoman Janet Yellen tried to sweeten the message in her press-conference after the announcement, saying that monetary tightening still may happen this year, perhaps even in October. The market was not convinced by such claims, leading to the slump of the dollar across the board.
EUR/USD climbed 1.3 percent from 1.1288 to 1.1430 as of 21:20 GMT today. GBP/USD jumped from 1.5488 to 1.5586, touching the daily high of 1.5630. USD/JPY dipped from 120.56 to 120.03.

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