US Dollar Soars as December Hike Remains Possible

The US dollar surged against other most-traded currencies on Wednesday after the Federal Reserve mentioned that a December rate hike remains in the cards. Unsurprisingly, the announcement made a tremendous impact on the market.
The Fed made no changes to its monetary policy, surprising no one. Yet it said in uncharacteristically bold language that a rate lift-off at the next meeting remains a possibility:

In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation.

Of course, such statement in no way guarantees that the Fed will hike rates in December. Nevertheless, it reignited speculations about the December hike after market participants had lost basically all hope on seeing monetary tightening soon. As of now, the CME FedWatch shows a 43 percent probability of an interest rate hike in December. Not a huge number, true, but it is still far bigger than it has been before the Fed’s statement.
EUR/USD dropped from 1.1045 to 1.0927 yesterday and remained at that level as of 5:03 GMT today. GBP/USD traded at 1.5257 after falling from 1.5303 to 1.5267. USD/JPY jumped from 120.39 to 121.09 during the previous trading session but retreated to 120.75 during the current session.

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