EURUSD increased noticeably overnight, having good reasons for it. The current EURUSD quote is 1.1090.
Well, the US Federal Reserve System lifted the rate by 25 base points to 5.25% per annum. This was not unexpected.
The unusual part was the Fed's signals: it seems that the cycle of interest rate increases is over. The Fed wiped out all indications of further rate increases from the follow-up speech but did not mention the pause openly either. This is very characteristic of the regulator — saying a lot without saying anything. The interest rate will be kept high for some time and only later the decision to bring it down will be made.
All this could be read between the lines. Jerome Powell, the Fed's chairman, has succeeded in presenting decisions in a manner that will not provoke excessive volatility in capital markets. He also mentioned the public debt limits: it was important, Powell said, not only to lift the limits but also to avoid losing precious time.
The US dollar made all the necessary conclusions very fast: most probably, the interest rate will be left without changes for three to four months, and then the Fed will start smoothly revising the inflation situation. This is bad news for the USD, and it was fully accounted for in the quotes.