On Wednesday, EUR/USD fluctuated between the 1.1650 and 1.1635 marks after the Federal Reserve lowered interest rates by 25 basis points, which was anticipated. However, there were two dissenting voices in the meeting. As of the latest updates, the currency pair was experiencing volatility as traders awaited insights from Federal Reserve Chairman Jerome Powell.
Dollar wavers as attention turns to Powell’s comments for future guidance
The majority of the Federal Open Market Committee voted to adjust the federal funds rate down to a range of 3.75% to 4%. Among the dissenters was Federal Reserve President Stephen Milan, who favored a more aggressive cut of 50 basis points, contrasted by Kansas City Fed President Jeffrey Schmidt, who preferred to maintain the current rates.
The Fed’s statement highlighted that “Economic activity is expanding at a moderate pace. Employment growth has slowed this year, and while the unemployment rate rose slightly, it has remained low through August. Recent indicators support these trends. Although inflation has increased since the start of the year, it remains somewhat elevated,” the central bank noted.
Additionally, the Fed announced, “The Committee has decided to conclude the reduction in gross securities holdings on December 1,” signaling an end to the gradual reduction of the balance sheet as part of ongoing policy adjustments.
EUR/USD’s response to the Fed’s decision
With EUR/USD currently resting around 1.1650, traders are closely monitoring Powell’s upcoming remarks. Should the pair trend upwards, the first significant resistance would be at the day’s peak of 1.1665, followed by a notable level at 1.1700. On the flip side, the first support would be the day’s low of 1.1618, with a further level at 1.1600.
