US Dollar Stays Volatile as Traders Speculate About Fed Policy

The US dollar remained extremely volatile following yesterday’s Federal Reserve meeting. The currency was soft at start of today’s session but attempted to rally later. As a result, the greenback was mixed today.
The Fed kept the target range for the federal funds rate at 1.5% to 1.75% as was expected by basically everyone. Some analysts pointed at the word “symmetric” that described inflation goal, interpreting them as a sign that the Fed can tolerate overshooting the inflation target. Moreover, the statement said that the rate of economic activity was “moderate.” Overall, the Fed sounded a bit more dovish than was expected.
Despite that, the outlook for Fed policy remained little changed. CME FedWatch continued to show a 100% chance for a hike in June. Chances for another hike in September fell a bit, but remained at about 70%.
Now, traders wait for tomorrow’s nonfarm payrolls to confirm that the US economy remains strong.
EUR/USD opened at 1.1950, rallied to the high of 1.2009 intraday, and traded at about 1.1975 as of 16:24 GMT today. GBP/USD traded at 1.3565, close to the opening level of 1.3573, following the earlier rally to the high of 1.3630. USD/JPY slumped from 109.82 to 109.10.

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