The dollar collapsed following the FOMC monetary policy decision in the Wednesday afternoon session. Although the Fed left its benchmark interest rate unchanged at 0%-0.25%, it announced additional measures to prop up the economy and loosen credit to the markets. The statement announced, To provide greater support to mortgage lending and housing markets, the Committee decided to increase the size of the Fed's Balance sheet further by purchasing up to an additional $750 billion of agency MBS, totaling $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. The Fed also announced the purchase of up to $300 billion of longer-term Treasuries in the next six months.

The surprise move by the Fed was lauded by the US equity markets, sending the Dow Jones higher by over 1.5% and the S&P 500 sharply up by over 2.4%. However, the greenback sold off heavily - tumbling to a fresh two-month low against the euro at 1.3436.

GBP Recovers from Jobs

The pound was initially lower versus the dollar and euro, slipping to 1.3847 and 0.9414, respectively. Dragging the sterling sharply lower was a dismal report on the UK jobs data. The January ILO unemployment rate edged up in line with expectations to 6.5%, versus 6.3% in the previous month. The February claimant count spiked up by 138.4k, bringing jobless claims to 1.39 million - which marked its highest level in 38-years.

Cable continues to teeter just beneath the 1.40-level, with interim support starting at 1.3930, followed by 1.39 and 1.3870. Additional floors will emerge at 1.3860, backed by 1.3840 and 1.38. On the topside, resistance is seen at 1.40, followed by 1.4040 and 1.4070. Subsequent ceilings are eyed at 1.41, followed by 1.4150 and 1.42.