The markets have reacted, as expected, with a strong USD sell-off to the surprising news that the Federal Reserve decided not to ease its stimulus this month. It was already 'priced in' the FX market that the Fed would start tapering by 10bn dollars, although only a few analysts, like Kathy Lien, managing director at BK Asset Management [or Craig Erlam from Alpari UK and Steen Jakobsen at Saxo Bank] had considered that it may start in December, if then. "If the Fed chooses to do so, we expect the dollar to sell-off quickly and aggressively," said Lien.
The EUR/USD reacted higher, breaking the key resistance of 1.34 and rapidly climbing to levels close to 1.3488, right after the announcement.
The excessively dovish tone in Ben Bernake's speech has also boosted the pair, which jumped above 1.3500, reaching a multi-weeks high at 1.3512.
LiveCharts
The EUR/USD reacted higher, breaking the key resistance of 1.34 and rapidly climbing to levels close to 1.3488, right after the announcement.
The excessively dovish tone in Ben Bernake's speech has also boosted the pair, which jumped above 1.3500, reaching a multi-weeks high at 1.3512.
LiveCharts
