- Federal Reserve lowers Fed Funds rate by 25 basis points as mostly expected.
- US Dollar rises but then losses strength, DXY hits highest intraday level in two years.
- USD/CHF rises toward 0.9930 and then drops back to the 0.9900 area.
The USD/CHF pair jumped to 0.9927, the highest level since Monday after the announcement. Shortly afterwards retreat erasing most of the gains and moved back toward 0.9900. As of writing, trades at 0.9910, marginally higher for the day.
The pair still shows a bullish bias that will likely prevail as long as it remains on top of 0.9890. On the upside, the immediate resistance might be seen at the 0.9925 zone and above attention would turn to last week high at 0.9945.
The US central bank lowered the key rate for the first time in ten years. It justified the move by the implications of global developments for the US economic outlook and muted inflation pressures. The decision was not unanimous: two members voted for no rate cut. Fed’s Chair Powell is offering a press conference.
Now the CME Group’s FedWatch Tool’s shows a probability of one more 25 basis points rate cut in September up to 75% from 55% seen yesterday. Despite the move, the greenback is still up for the day across the board. The DXY jumped to 98.42, the highest intraday level in two years and then pulled back to 98.30.
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