US Dollar Index unchanged after FOMC statement

• USD little changed after Fed’s decision. 
• Fed kept rates on hold,  March hike expected. 
• Wall Street erased gains. 

The US dollar moved marginally after Fed’s decision to keep rates unchanged. The greenback reacted to the upside but gains were short-lived and it moved back to the levels it had before the announcement. 

As expected, on a unanimous decision, the Federal Reserve kept interest rates unchanged. It was the last meeting presided by Janet Yellen. FOMC left the doors open for a March rate hike. In the statement, it offered an upbeat assessment of the economy and mentioned that inflation should stabilize around 2% this year.

The US Dollar Index (spot) spiked to 89.30 but quickly retreated back to the 89.10 area, where it was before the decision. The Index is about to end the day practically unchanged from yesterday’s close. It continues to consolidate, unable to recover from 3-year lows.

Equity prices in Wall Street dropped after the statement. The Dow Jones was down 0.05% and the Nasdaq was losing 0.15%. Gold prices hit a 1-week low at $1,332/oz and then rebounded sharply rising on top of $1,345. 

DXY Technical levels 

To the upside, resistance levels lie at 89.30, 89.65 (Jan 29 & 30 high) and 90.15 (Jan 17 & 19 low). On the downside, supports are seen at 89.00, 88.70 and 88.45 (Jan low).