US retreats after FOMC mega-hike
The US dollar gave back some recent gains overnight post-FOMC as Powell’s comments post-meeting were interpreted as implying a less aggressive scale of rate hikes. To me, that is a flawed interpretation, as the FOMC signalled a higher terminal rate and lifted its end-of-2022 target rate as well. Even if we don’t get any more 0.75% hikes, rates are still going up each meeting and will finish at a higher level. Indeed, the US dollar retreat was very mixed. It hardly moved against the euro and gave only modest gains to the Yen and Asian currencies, while sentiment currencies like the AUD and GBP outperformed.
The dollar index finished 0.60% lower at 104.85, and in Asia, has already regained 0.20% to 105.05. The dollar index has tested, but bounced off support at 104.60 for three days in a row, marking it as an important support and pivot point now. Resistance remains at…
