The dollar was hoisted to a more than five-year high against the yen on Thursday after the Federal Reserve started to dial back its massive bond-buying stimulus, giving markets a strong signal that the U.S. economy was growing at a healthy clip.
The euro also came under pressure against the greenback, hitting a two-week low, and analysts at BNP Paribas continued to recommend short euro/dollar strategy.
The U.S. central bank said it would reduce its monthly asset purchases by $10 billion, bringing them down to $75 billion. The taper will be equally split between mortgage-backed securities and Treasury bonds.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.