USD Fails to Hold Fed-Induced Gains

The greenback initially rallied on the back of the Fed's decision not to extend the duration of their asset purchase program - a move that markets interpreted hawkishly, which saw EUR/USD fall sharply to new daily lows of 1.2125. This move swiftly reversed ahead of the close, however, as Fed's Powell reassured markets that the Fed would use communication tools and guidance to avoid any future taper tantrum - allowing equities to resume their uptrend and, once again, challenge all time highs.

CAD was easily the poorest performer Wednesday, extending the market reaction to Tuesday's speech from BoC Governor Macklem, who warned that Canada could resume an economic tailspin in early 2021. Nonetheless, USD/CAD's rise stopped short of breaking the 1.28 handle.

NOK, GBP and EUR were the strongest in G10. CAD, CHF and USD were the weakest.

Focus turns to further central bank rate decisions, with the UK, Norwegian, Swiss and Mexican policy announcements all due Thursday.