Dear all,
I do not quite understand the last FED Decision.
It was expected that we get a 75 BPS rate hike. So why did we see now a the US Dollar weaken?
Should not every rate hike make the Dollar appreciate and for example EURUSD go bearish?
What would happen if we would see a 50BPS or 100 BPS rate hike?
Thank you in advance for your help.
Don’t look at the decision, that’s not the driver of the market. Listen to what was said in the conference after. Last time 0.75% rise with a statement that suggested more was to come. This time 0.75% rise but a statement that they think this is the correct level. That means unless the data gets worse, the next decision is likely to stay the same.
0.75% was expected with an outside chance of 1%. Only if that was significantly different would the result affect the market. It’s all about what the analysts think will come next