The exchange rate of the Euro/Dollar currency pair rose to the level of 1.1840.
At the meeting on Wednesday, the FOMC kept the federal funds rate at the current level, as expected. In addition, the regulator will continue to buy $ 80 billion worth of treasuries per month and $ 40 billion worth of mortgage-backed securities. But the most important signal that the Fed sent to the markets was the message that the US economy continues to move towards the goals, the achievement of which will allow us to start taping. This news provoked a rise in the dollar across the entire spectrum of the market and a decline in American stock indices. However, the stock market quickly recouped these losses and returned to the levels at which it was before the announcement of the FOMC decision. The US currency also fell to a weekly low against the euro.
Fed Chairman Jerome Powell said at a press conference that consumer prices will fall back to long-term target levels. At the same time, the chairman of the Central Bank noted that if the regulator sees signs of a significant and steady increase in medium-term inflation above the target level, it will definitely take appropriate measures. The growth of the euro against the dollar was caused more by the inertia of the local trend of the first half of the week than by the reaction of market participants to the change in the Fed's position. As expected, the July meeting did not allow us to learn the details of the upcoming tightening of monetary policy in the United States. At the same time, many analysts agree that the meeting in September will be more substantive and will allow for a more accurate assessment of the timing of an interest rate increase.
In our forecast, we expect further growth of the Euro/Dollar exchange rate to the levels of 1.1860, 1.1880 and 1.1900.