As the bank refrained from hawkish comments, traders opted to take profit following the recent ascent in the greenback
The dollar came under pressure across the market in a knee-jerk reaction to the outcome of the FOMC meeting late on Wednesday to close the day modestly lower against its major counterparts.
As expected, the Federal Reserve decided to reduce its asset purchases by $15 billion per month, starting mid-November. The central bank also noted that it is prepared to adjust the pace of purchases depending on the economic outlook. During his press conference, Powell said they expect inflation to start easing toward 2% in the second half of next year.
As the bank refrained from hawkish comments, and the decision was in line with expectations, traders opted to take profit following the recent ascent in the greenback. However, the dollar demand reemerged on Thursday, helping it to pare most of the post-Fed losses during the Asian session. In general, the central bank’s meeting had little to no impact on investor sentiment in the global stock markets.
Elsewhere, fresh data from ADP showed that employment in the US private sector jumped by 571,000 jobs in October after surging by a revised 523,000 jobs in September. Meanwhile, the ISM services PMI climbed to 66.7 from 61.9 in September. Upbeat data helped ease the downside pressure surrounding the dollar.
Against this backdrop, EURUSD exceeded the 1.1600 figure but had to give up yesterday’s gains on Thursday as the greenback switched into recovery mode. The pair dipped back to the 1.1570 region at the start of the European session. Later in the day, the European Commission will release the updated economic forecasts for the Eurozone while in the United States, the weekly initial jobless claims and unit labor costs will come into the market focus.
