The US dollar fell against most currencies after the policy announcement from the Federal Reserve. The drop was not especially big as the Fed did not surprise markets very much with its announcement.
The US central bank made no changes to its monetary policy, surprising no one. The vote was unanimous. It is interesting to note that Kansas City Fed Governor Esther George, who was previously a dissenter voting for a hike, now joined others in the cautious stance.
What the Fed did change were its economic forecasts. The economic growth outlook for 2016 and 2017 got a downside revision. What is even more important, the projected interest rate path promises a smaller number of interest rate hikes in the next year and the year after that.
EUR/USD climbed from 1.1207 to 1.1259 as of 21:56 GMT today, rising to 1.1297 intraday. GBP/USD jumped from 1.4110 to 1.4193. The Japanese yen did not join the rally, and as a result USD/JPY traded at 105.99, very close to the opening level of 106.10.
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