There was great anticipation before the US Fed released its latest monetary policy statement early on Thursday morning and Fed Chair Yellen certainly didn’t disappoint US Dollar Bulls. The Fed decided it would taper the last $15 Billion it has been printing each month to zero and also spoke positively about the US jobs market. This end a trillion dollar money printing program that was this time last year running at $85 Billion Dollars per month.
The US Fed specifically said in its statement “Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. A range of labor market indicators suggests that underutilization of labor resources is gradually diminishing.”
Yellen spoke from both sides of her mouth as I expected saying the US Fed will raise rates if the economy keeps improving but she also said that the Fed may keep rates on hold even if the economy improves. So why did the US Dollar rise so sharply?
Yellen in her statement talked up the labor market in the US and said that "underutilization of labor resources is gradually diminishing", when in previous statements she said this was "very underutilized".
The bottom line is that traders took her statement to mean that interest rates are likely to rise sooner rather than later.
You can read the full Official Federal Reserve Statement by clicking here.
For the full LTG GoldRock market commentary on this Forex News item please read your LTG GoldRock Insider Report.
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