U.S. Dollar at 4 Year High after FOMC Rate Statement Indicates QE’s End in October
September 18th 2014 Guest post by Jay Hawk at Orbex
The Greenback continued higher this morning, after the release of the FOMC Rate Statement. Although Fed monetary policy officials stated they will keep the Fed Funds rate at the current level for a “considerable time”, they indicated that asset purchases would probably be phased out next month, “if incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective.”
The Greenback reacted positively to the news, with the U.S. Dollar Index hitting a high of 84.78, which is the highest the benchmark index has been since July of 2010. It is currently up +0.3700 or +0.44 percent on the day at 84.7150.
The statement also listed a number of measures to be undertaken before the Fed would start raising interest rates, stating that, “The Committee expects to cease or commence phasing out reinvestments after it begins increasing the target range for the federal funds rate; the timing will depend on how economic and financial conditions and the economic outlook evolve.”