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Dollar Drops With Yields After Initial Two-Way Trade

  • Currencies and bond markets are reacting firmly to the Fed decision, with the USD Index falling sharply to touch the lowest levels of the session. US 10y yields are falling in a similar fashion.
  • The US 10y yield has shed a basis point or so to show below the 1.30% mark and through the Tuesday lows. The USD has shed around 0.2%, boosting EUR/USD to the session's best levels at 1.1753. The 50-dma at 1.1791 marks the next key level.
  • Markets potentially responding to the Fed declining to specify a date for a taper (although this was within analyst consensus), but the dot plots showing the potential for rate hikes as soon as 2022 shielding the greenback from protracted losses at this stage.
  • Focus turns to the Fed press conference in just over 15 minutes time.
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