Euro Spikes Higher Against Dollar on Dovish Fed Interest Rate Decision

The euro spiked higher against the dollar, triggered by the dovish tone adopted by Fed Chairman Jerome Powell after announcing the bank’s interest rate decision. The EUR/USD currency pair had traded sideways for most of today’s session before the spike higher, as the US Dollar Index crashed, boosting riskier currencies.
The EUR/USD currency pair rallied from a low of 1.1886 in the early Frankfurt session to a high of 1.1985 in the American market and was trading near these highs at the time of writing.
The currency pair traded sideways earlier today amid subdued investor sentiment as many waited for the Fed’s event later in the day. The release of the in-line eurozone consumer price index report for February had a minimal impact on the pair. According to Eurostat, euro area annual inflation remained stable at 0.9%, as expected. The European Commission President Ursula von der Leyen‘s comments that they would have 70% of adults fully vaccinated by the summer could not break the pair out of the range. Investor risk appetite was almost non-existent as all eyes were on the Fed event.
The release of the weak US building permits data by the Census Bureau early in the American session had a muted impact on the fibre. The release of the Fed’s interest rate decision and statement triggered the currency pair’s spike after its dot plot indicated the next rate hikes could come in 2024.
The currency pair’s future performance is likely to be affected by Christine Lagarde’s speech and US dollar dynamics.
The EUR/USD currency pair was trading at 1.1982 at 20:42 GMT after rallying from a low of 1.1886. The EUR/JPY currency pair was trading at 130.42, having risen from a low of 129.75.
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Original from: www.earnforex.com