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US Dollar Surges as Fed Upgrades Interest Rate Forecasts

US Dollar Surges as Fed Upgrades Interest Rate Forecasts

David Rodriguez, Head of Product

- US Federal Reserve tapers as expected, no major surprises in accompanying statement

- US Dollar surges to fresh highs versus Japanese Yen as interest rate guidance marginally improved

- Markets now await Fed Chair Janet Yellen’s conference at 18:30 GMT

The US Dollar has surged to fresh multi-year highs versus the Japanese Yen as the US Federal Reserve tapered QE policy and raised guidance on the future of interest rates.

Traders sent the Greenback sharply higher across the board on the Fed statement, but eyes now turn to Fed Chair Janet Yellen’s press conference due at 18:30 GMT.

An upgrade in interest rate forecasts was enough to send US Treasury Yields higher as well as drive the Greenback to fresh peaks. Yet there remain questions on exit strategy, and the tone of Yellen’s press conference could drive an important correction.

US Dollar Surges as Fed Upgrades Interest Rate Outlook

US Dollar Surges as Fed Upgrades Interest Rate Forecasts

Source: FXCM Trading Station Desktop, Prepared by David Rodriguez.

Keep an eye on the DailyFX Forex Realtime News Feed for up-to-the-minute updates. We will update any Dollar forecasts during Yellen’s press conference.

--- Written by David Rodriguez, Quantitative Strategist for David specializes in automated trading strategies. Find out more about our automated sentiment-based strategies on DailyFX PLUS.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.