The dollar fell on Thursday after the Federal Reserve delivered an outlook that was not as hawkish as some had anticipated.<\/p>\n
Oleg Dubyna \/ 500px | 500px | Getty Images<\/p>\n
The dollar fell on Thursday after the Federal Reserve<\/a> delivered an outlook that was not as hawkish as some had anticipated, giving investors confidence to short the currency as they bet on two more rate cuts next year.<\/p>\n The Fed at the\u00a0conclusion\u00a0of its two-day policy meeting lowered rates by 25 basis points as expected, but remarks from Chair Jerome Powell at his post-meeting press conference surprised some who had been positioned for a more hawkish tone.<\/p>\n “For us, the big takeaway was a dovish tilt to the accompanying commentary, and at Fed Chair Powell’s press conference,” said Nick Rees, head of macro research at Monex Europe.<\/p>\n As a result, investors sold the dollar, which in turn pushed the euro<\/a>\u00a0above the key $1.17 level and close to a two-month high of $1.1705 in early Asia trade on Thursday.<\/p>\n Sterling<\/a>\u00a0touched a 1-1\/2-month peak of $1.3391, while the yen<\/a>, which has recently come under pressure from still-wide interest rate differentials between Japan and the rest of the world, rose 0.25% to 155.64 per dollar.<\/p>\n Against a basket of currencies, the dollar<\/a>\u00a0fell to its lowest since October 21 at 98.543.<\/p>\n “I think most were looking for a rerun of the same hawkish sentiment which we saw in that October FOMC meeting. But this has certainly a different tone about it, the commentary’s different, the T-bill buying supportive, the vote certainly wasn’t as hawkish as everybody expected,” said Tony Sycamore, a market analyst at IG.<\/p>\n “This is, for me, the green light for risk assets to rally into year-end.”<\/p>\n Wednesday’s outcome reinforced market expectations for two more rate cuts next year, against the Fed’s\u00a0median\u00a0expectation for a single quarter-percentage-point cut next year.\u00a0<\/p>\n The central bank also announced that it would start\u00a0buying\u00a0short-dated government bonds to help manage market\u00a0liquidity\u00a0levels beginning December 12, with the initial round totaling around $40 billion in Treasury bills.<\/p>\n That kept bonds supported, with the two-year U.S. Treasury yield<\/a>\u00a0falling about 3 bps to 3.5340%. The benchmark 10-year yield<\/a>\u00a0was similarly down 3 bps to 4.1332%. Bond yields move inversely to prices.\u00a0<\/p>\n “The earlier start and size of the T-bill purchases surprised investors, leading (to) a meaningful rally led in Treasuries by the front-end,” said analysts at Societe Generale in a note.<\/p>\n In other currencies, the Australian dollar<\/a>\u00a0retreated from a roughly three-month top hit in the previous session and was down 0.14% to $0.66665. The New Zealand dollar<\/a>\u00a0eased 0.07% to $0.5812.<\/p>\n","protected":false},"excerpt":{"rendered":"The dollar fell on Thursday after the Federal Reserve delivered an outlook that was not as hawkish as…\n","protected":false},"author":2,"featured_media":178863,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[11468,7263,941,357,7255,7261,39211,10913,20046,42,4486,4487,94852,93011,43,40,38,41,39,3309,34468,40042,7262],"class_list":["post-178862","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-australian-dollar","tag-australian-dollar-us-dollar-fx-spot-rate","tag-breaking-news-markets","tag-business-news","tag-currency-markets","tag-dxy-us-dollar-currency-index","tag-eur-usd","tag-federal-reserve-system","tag-gbp-usd","tag-headlines","tag-interest-rates","tag-jerome-powell","tag-money-markets","tag-new-zealand-dollar-us-dollar-fx-spot-rate","tag-news","tag-top-news","tag-top-stories","tag-topnews","tag-topstories","tag-u-s-10-year-treasury","tag-u-s-2-year-treasury","tag-u-s-dollar","tag-usd-jpy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/178862","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=178862"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/178862\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/178863"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=178862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=178862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=178862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}