EURUSD is processing results of the US Federal Reserve October meeting, where the regulator cut the key rate the third time this year.
The major currency pair is rising Thursday morning in response to the Fed’s decision. The current quote for the instrument is 1.1162.
So, it was the third time this year the Fed cut its benchmark rate, now it’s 1.50-1.75%, just as expected. Eight members voted in favor of the decision and two were against. However, that’s wasn’t the point. The Fed’s comments that followed the rate decision might be perceived as readiness to take a break in loosening its monetary policy.
For example, the previous reference that it “will act as appropriate” to sustain the economic expansion was removed from the policy statement.
Meanwhile, the regulator is going to continue supporting the economy as much as it requires. The Fed said that open market operations would continue at least until the end of quarter II 2020, and Repo – until the end of January 2020.
Global investors were rather calm in their reactions to this news, but the USD went down nonetheless. However, the fact that the Fed is ready to take a break in the easing cycle means that the regulator managed to escape the White House’s pressure and will implement the monetary policy as it finds fit.
The statistics published yesterday showed that the US GDP added 1.9% q/q in the third quarter, which is better than market expectations. In the previous quarter, the economy expanded by 2.0% q/q, so the negative difference was too little and the USD avoided serious decline.