The USD managed to keep balance after the Fed’s attack. Overview for 16.03.2020
The major currency pair is rising a little bit on Monday morning after the Fed’s decision to cut the rate down to zero.
On Monday, EURUSD remains positive after the Fed’s unscheduled meeting and its decision to cut the rate. The current quote for the instrument is 1.1130.
So, the US Federal Reserve had another unscheduled meeting and decided to cut the key rate for the second time this month. This time, it was reduced down to 0% – 0.25%, which is a “rock-bottom low”. In the comments, the regulator said that the decision was made due to the coronavirus pandemic
As a result, the rate dropped by 150 basis points over a month and that’s what may help global markets to reverse to the upside. However, one shouldn’t exclude a possibility that the first reactions might be rather negative: now that the Fed cut the rate down to zero, it means that the situation might get out of control and economic effects might be much more serious than expected.
It is known that the regulator is going to keep the rate low up until the moment it is sure that the worst is behind.
It’s quite interesting that the regulator’s March meeting, which is scheduled for this week, hasn’t been canceled yet.
The USD President Donald Trump responded to this news in his usual upbeat fashion and said that the decision was positive for the economy. In fact, everything happened the way Trump wanted, except that it was quite naturally and he didn’t have to put pressure on the Fed.