Breaking News: Fed Avoids QE Tampering, Dollar Pounded into the Ground

The Federal Reserve shocked the Forex market today as it made no changes to its monetary policy, avoiding stimulus tampering that everybody was expecting. The dollar came crashing down as a result.

The most important event this week (or perhaps even this month) has occurred today: the Federal Open Market Committee meeting. Most market participants believed that some form of quantitative easing reduction will be announced by the FOMC. Therefore it was a shock to see no changes to the monetary policy.

The Committee said in the statement:

The Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.

It means that the total size of assert purchases remains at $85 billion per month. Moreover, the 6.5 percent unemployment threshold remained unchanged. On top of that, the FOMC revised its economic growth projections down.

EUR/USD surged from 1.3357 to 1.3512 as of 21:33 GMT today and its intraday high of 1.3540 was strongest since February 7. GBP/USD jumped from 1.5901 to 1.6135, trading near the highest since January 14. USD/JPY sank from 99.10 to 98.06.

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