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  • FOMC keeps policy statement virtually unchanged from March.
  • US Dollar Index drops to 2-week lows below 97.20.
  • Attention turns to Chairman Powell’s press conference.  

Although the FOMC didn’t offer any surprises in its monetary policy statement, the greenback came under a renewed bearish pressure and caused the USD/JPY pair to extend its daily slide. As of writing, the pair was trading at 111.12, losing 0.27% on a daily basis.

Following its two-day meeting, the Fed decided to keep its policy rate unchanged in the 2.25%-2.5% range as expected. In the accompanying press release, the bank announced that it cut the interest on excess reserves rate to 2.35% from 2.4% to keep the fed funds rate well within the range and reiterated that it will remain patient while determining what future adjustments to rates might be appropriate.

Commenting on the FOMC’s policy statement, “Perhaps the Fed needs a copy editor: In the March FOMC statement it called 2.2% growth in the 4th quarter “solid” and in the May statement it said 3.2% in the 1st was also “solid”   I have heard of ‘situational ethics’ but this is the first for situational economics,” FXStreet senior analyst Joseph Trevisani said.

The US Dollar Index, which suffered losses earlier in the session after the ISM Manufacturing PMI came below the market expectation in April, pushed lower and was last seen down 0.36% on the day at 97.17. FOMC Chairman Powell’s press conference will be watched closely by the market participants next.

Technical levels