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Greenback Loses Shine As Equities Bounce Post-FOMC

FOREX
  • The US Dollar initially reacted favourably to the announcement of an accelerated taper by the Federal Reserve on Wednesday.
  • The dollar index rose roughly 30 pips on the release with EURUSD fading to a fresh low of 1.1222 and USDJPY rising back above 114 for the first time since November 28.
  • The initial gains were short-lived and the underlying supportive tone for equity indices worked against the greenback throughout Chair Powell’s press conference.
  • The dollar index (-0.22%) plumbed fresh lows for the session and EURUSD squeezed all the way back to 1.1299.
  • Revived risk sentiment lent support to both AUD (+0.85%) and NZD (+0.45%) with AUDJPY a standout, rising well over 1% on the session.
  • NOK was also at the top of the G10 leaderboard with bolstered risk sentiment and worth noting there is a Norges Bank decision tomorrow morning where consensus is for them to hike 25bps.
  • Additionally, we have the two main events, in the form of the BoE and the ECB as well as a policy decision from the SNB.
  • Preceding this, Aussie employment data is scheduled overnight with Eurozone Flash PMIs also on the docket.

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