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USD Starts Recovery After Fed Rate Hold

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The dollar started Monday trade on a firm footing, having recovered recent losses as major central banks were quick to burnish their dovish credentials after the Federal Reserve last week delayed a long-anticipated hike in U.S. interest rates.

Further lifting the mood of dollar bulls were comments from a top Fed policymaker, John Williams, who said a rate hike this year is still likely given the decision to stand pat was a “close call”.

The dollar index was back at 95.305, well off a three-week low of 94.063 set on Friday. Against the yen, the greenback popped to 120.08, rebounding from a trough around 119.04.

The euro slid to $1.1285, having recoiled from Friday’s peak of $1.1460. Traders said failure to close at a technical level above $1.1400 had also prompted some selling in the common currency. It has now retraced about 50 percent of this month’s rally from $1.1087 to $1.1460.

Via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

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