The dollar tumbled yesterday, after the FOMC appeared even more dovish than in January, revising its median dot for 2019 to point 0 hikes, from 2 in December. The Committee now sees only one hike throughout its forecast horizon, in 2020. The pound also fell, and even more than its US counterpart. The driver was once again Brexit developments, and specifically uncertainty surrounding the UK’s request for extending the withdrawal process.
USD Tumbles as FOMC Erases 2019 Hikes from its ‘Dot Plot’
The dollar traded lower against all but one of the other G10 currencies yesterday. It underperformed the most against NZD, AUD, JPY and SEK in that order, while it lost the least ground against CAD. The currency against which the greenback ended the day slightly higher was GBP, which came under massive selling interest due to uncertainty surrounding the Brexit extension (see below).
The driver behind the dollar’s tumble was the FOMC decision. The Committee decided to keep interest rates unchanged within the...
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