Fed hikes by 0.75%

Source: Dukascopy Bank SA
On July 27, the US Federal Reserve hiked its Federal Funds Rate by 0.75%, by bringing the Federal Funds Rate up to 2.50%. The markets expected the 0.75% hike, despite speculations of a possible 1.00% hike.

In addition, note the released Federal Open Market Committee Statement, which consists of the reasoning for the rate hike.

Afterwards, at 18:30 GMT, the head of the Federal Reserve Jerome Powell hosted a press conference. The top takeaways from the press conference where that the Federal Reserve is set to monitor data and react accordingly, instead of setting up guidance.

Quoting the statement: "In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals."

Released Document

FOMC Statement

Press Conference

FOMC Press Conference July 27

The EUR/USD currency exchange rate reacted to the announcement with an initial drop of 36 base points, before recovering 105 points or 1.04%.

On a larger scale, the pair has been fluctuating around the 1.0200 mark since bouncing off the 1.0000 mark.

Initial Reaction

Larger scale situation

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