USD Firm after the Fed Announces another 25bps Rate Cut

Sept. 18, 2019 (Western Union Business Solutions)  – The  U.S. dollar added to its modest gains after the Fed cut interest rates as expected and offered an overall sanguine assessment of the U.S. economy.

 

The Fed shaved another quarter percentage point off the fed funds rate which it lowered to a range of 1.75% to 2.00%. The 7-3 vote in favor of today’s action showed that two officials dissented, preferring to keep policy unchanged, while the other wanted a bolder 50 basis point cut.

 

The Fed is now forecasting slightly quicker growth of around 2.2% this year. The central bank expects unemployment to stick near 50-year lows below 4%, while inflation went unrevised just below the Fed’s 2% goal.

 

Next up: the chairman’s press conference at the bottom of the hour.

 

Barring a material deterioration in U.S. data, the dollar should benefit from the view that the Fed may have fired its last cut for a while, dampening elevated market expectations of action again before year-end.

 

There will be just two more Fed decisions this year, on Oct. 30 and Dec. 11.

 

EUR 1.1038

JPY 108.25

GBP 1.2472
CAD 1.32 94


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