EUR/USD extends slide below 1.1100 as US Dollar soars during Powell’s press conference

• Federal Reserve cut rates by 25 basis points, two members voted against.  
• Powell refers to the cut as a mid-cycle adjustment, boosts US dollar.  
• Greenback soars across the board during Powell’s press conference, even against EM currencies.  

After approaching 1.1130, the EUR/USD pair turned again to the downside and broke previous lows, falling sharply to 1.1063,  a fresh 2-year low. It remains under pressure, as the US Dollar holds near the highs across the board.  

The greenback rose immediately after the US central bank announced the first rate cut since the 2008 financial crisis. Then pulled back all the way and jumped during Fed’s Chair Powell press conference. The key trigger was when Powell said the decision to cut rates differs from the start of an easing cycle. He mentioned the move was a mid-cycle adjustment.  

“We characterise this as an early pre-emptive move to help ensure the longest US economic expansion on record continues. It will likely ease again, but not by as much as the market is pricing”, said ING analysts.  

Wall Street tumbled and US yields move higher over the last minutes, as the greenback rallied. As of writing, EUR/USD holds below 1.1100, on its way to the weakest daily close since May 2017. The decline found support at the strong 1.1060 area; below the next one is seen around 1.1000.