The Dollar fell against most major currencies last night, after the Federal Reserve surprised the markets by announcing no reduction to its economic stimulus program - no tapering!
The US dollar dropped to a seven-month low against the Euro and its lowest level this month against the Yen. It fell against the Pound to its weakest since Jan. 13, and a nearly three-month nadir versus the Australian dollar. Emerging-market currencies surged against the greenback, with the Brazilian real, Indian rupee and South African rand each rallying by more than 2%.
The Dollar dropped sharply immediately after the Fed said that it wanted to see more evidence of sustained improvement in the economy before it scaled back its bond-buying program. During Fed Chairman Ben Bernanke's press conference following the announcement, the dollar continued to weaken as he sounded an even more dovish note when he appeared to signal a less-hasty rush to taper bond-buying in the near term.
After the announcement the Pound was trading at $1.6149 against the Dollar, compared with $1.5901 late Tuesday.
Posted in Daily Market News on May 30 2014