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USD down after Fed decision

Daily Currency Update

Demand for US dollar continued to lag across the board on Thursday morning as investors digested key central bank decisions. The US Federal Reserve announced on Wednesday that they will end their pandemic-era bond purchases by March and allow for three rate hikes over the course of 2022, another three in 2023 and two more in 2024. Interest rates will remain on hold for now and they have doubled the pace of tapering to $30 billion per month. The US dollar showed an initial rally to the news but soon turned red and dropped against some of its major rivals over the course of yesterday.  The US Dollar Index was sitting around 96.14 at the time of writing.

Key Movers

The pound climbed against the US dollar on Thursday after the Bank of England raised interest rates. GBPUSD jumped 0.43% to trade around 1.3318 at the time of writing. The euro also enjoyed some small gains against USD after the European Central Bank announced it will end its stimulus in March 2022 as planned. EURUSD was sitting a 1.1308 at the time of writing.

Expected Ranges

  • EUR/USD: 1.1232 - 1.136 ▲
  • GBP/USD: 1.3183 - 1.3367 ▲
  • AUD/USD: 0.7099 - 0.7221 ▲
  • USD/CAD: 1.2764 - 1.2926 ▼