- USD / JPY falls to hit seven-month lows at 103.50.
- Powell’s dovish comments add to the negative pressure on the US dollar.
- The dollar is crashing across the board with equity markets on the rise.
The U.S. dollar it is slipping through fresh 6 1/2 month lows in the midrange of 103.50 after the chairman of the Federal Reserve appeared before the press after the November monetary policy decision.
The Fed stands firm
The Federal Reserve has kept its benchmark interest rate unchanged in the range of 0% – 0.25%, as well as its objective for the purchase of assets and has reaffirmed its commitment to support the US economy “by promoting its maximum objectives for employment and price stability “against the impact of the COVID-19 Pandemic.
The monetary policy statement affirms that economic activity and employment levels have continued to recover although they remain at levels well below those at the beginning of the year. The Bank also warns that lower consumer demand and falling oil prices are holding back consumer inflation.
The statement by Fed Chairman Jerome Powell has leaned towards the moderate side, as his opening statement stated that “the pace of improvement has moderated.” Although he noted that economic activity continued to recover, he also warned of the highly uncertain path ahead, which could have increased the negative pressure on the USD.
The dollar has remained on the defensive on Thursday, extending its pullback from Wednesday’s highs at 105.35 with equity markets rising as Democratic candidate Joe Biden approaches victory in the US presidential election.
The market is welcoming the possibility that the Biden presidency with Republicans in control of the Senate will block any attempts to tighten regulations or increase taxes on American companies.
Credits: Forex Street
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