Breaking Forex News – Fed drops ‘patient’ language, EURUSD rallies 2%

In the most volatile day for currencies since the Swiss National Bank’s January 15 removal of the implied EURCHF 1.20 floor, currency crosses across the FX spectrum were sent bouncing around 1%-2% after more central bank comments.

However this time it was US Fed Chair Janet Yellen doing the damage.

The US Fed dropped the word ‘patient’ from its language describing when it might begin raising interest rates – indicating that the era of zero-interest-rates might end sooner rather than later.

That would normally send the US Dollar higher – if US interest rates were to rise.

But not in today’s topsy turvy FX trading world.

The benchmark EURUSD pair saw a more than 2% swing from a low of 1.0579 up to above 1.08, with the Euro rallying and now trading at 1.0741 (as at 19:00 GMT).

The US Dollar dropped against most major currency pairs as the Fed simultaneously downgraded growth and inflation forecasts, while at the same time lowered their rate hike projections, if and when they do actually come.

While this is clearly not the same market displacement as January 15th’s surprise 20%+ rise in the value of the Swiss Franc, it will be interesting to see if there’s any fallout among brokers from what was a major (2%+) and surprise move in some of the more heavily traded currency pairs.

EURUSD chart March18

EURUSD intraday chart March 17-18. Source: Plus500.

Stay tuned to LeapRate…

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