EUR/USD jumped today following the policy announcement by the Federal Open Market Committee. While the FOMC raised interest rates, as was widely expected, it retained its dot plot, meaning no fourth hike is projected for 2018. This was certainly a disappointment for dollar bulls, therefore the greenback retreated against its rivals after the announcement.
US current account deficit increased to $128.2 billion in Q4 2017 from $101.5 billion (revised) in Q3. That was a bit more than $125 billion predicted by analysts. (Event A on the chart.)
Existing home sales climbed to the seasonally adjusted annual rate of 5.54 million in February from 5.38 million in January. Experts had promised a bit lower reading of 5.41 million. (Event B on the chart.)
Crude oil inventories dropped by 2.6 million barrels last week, whereas specialists had expected an increase by the same amount. Total motor gasoline inventories fell by 1.7 million barrels. (Event C on the chart.)
As was widely expected, FOMC increased the target range for the federal funds rate by a quarter of percentage point to 1.5%-1.75%. The Committee update its economic forecasts, predicting faster economic growth and lower unemployment rate than in the December forecast. Yet what was most interesting to the markets, the projected policy path remained the same, meaning that policy makers still anticipate three interest rate hikes in total this year. (Event D on the chart.)
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