Fed chairman Powell in dovish shift on monetary policy as Dollar drowns



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Fed chairman Powell in dovish shift on monetary policy as Dollar drowns

On Wednesday, 28th November, the Federal Reserve Chairman Jerome Powell told in an announcement that the US economy is strong and the growth rate is tremendous. He also mentioned about a dovish shift in the monetary policy disbanding the December’s price hike, as the inflation rate is closer to the central bank’s target of 2%.

As a response to this comments, stocks and interest rate futures jumped, yet American Dollar had been jolted downwards, as it has fallen against all of the major currencies after the announcement. Just before making the announcement, the USD had been trading around 96.92, looking to test the 97.17.

All of a sudden, this dovish Fed comment simply drowned the US Dollar momentum, as it had lost nearly 50 pips in less than 15 minutes and GBP and EUR had gained over 150 and 90 pips, respectively, within an hour of making the announcement.

While this report is being written, the American Dollar is doomed reigned at 96.19 and further fall might have been upcoming, as this interest rate hikes had truly been the pivotal point behind this recent slide. However, as Federal Chairman, Powel decided to set a dovish move on to the interest rate, after being criticized by US president Donald Trump, stocks started to surge and all of the US stocks including NASDAQ and DOW Jones industrial average are experiencing a safe haven at this moment.