FXstreet.com (Barcelona) - The FOMC has decided today to leave unchanged its funds rate at 0.25% as industrial production, housing starts and employment have continued to decline steeply, as consumers and businesses have cut back spending, as well as the Committee expects that inflation pressures will remain subdued in coming quarters. FOMC expects that a gradual recovery in economic activity will begin later this year.
Fed is prepared to buy longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets, as well as US Government will continue purchasing large quentities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets
USD and Dow Jones have react positively, Wall Street are growing above 8,350 pts, winning 177 points today. EURUSD is falling quickly after the FED decision, touching the 1.3105 the low of the day. USDJPY is climbed up to 90.75, the session hight.
According to Nick Nasad, analyst at CMS Forex: I think risk appetite is fueling a bit the Dollar strength, which seems sort of paradoxal in terms of the EUR/USD, but from the way price action was behaving the last two sessiong, the EUR/USD looked ready for a dip... the EUR/USD is responding with a knee-jerk Dollar strength as well as the USD/JPY.