FX Daily Wrap Up

After a mid-morning rally for the Euro, the US Dollar declined further when the Federal Reserve announced that interest rates would remain unchanged at 5.25 percent. For the better part of the year, interest rates have held steady, keeping the market's focus on the Federal Open Market Committee statement. Today's statement was only moderately more hawkish than the prior month. The FOMC held off on any change to see whether the surprise strength in recent data is a misleader or a false bullish indicator. The Feds stated that they needed at least two more months of solid economic data before considering the possibility of a fourth quarter rate hike. Further review of the statement showed that the Fed has acknowledged the signs of a potential bottom in the housing market, as well as firmer economic activity overall. The Fed remains concerned about inflation, given the recent upturn in oil prices and the potential for the tight labor market to boost wage pressures going forward. The US Dollar is currently selling off, which has once again pushed the EUR/USD pair over the 1.3000 mark. As we head into the Asian trading sessions, the EUR/USD is at 1.3031, and the GBP/USD is at 1.9643. David Hilgeman, XPRESSTRADE Analyst