US Dollar Raises After Fed Meeting; Pound Continues the sale

After the Federal Reserve cut its key interest rate by 25 basis points the US dollar rose in Asia on Thursday, but hinted that further cuts are not guaranteed.

The US Dollar Index gained 0.4% to 98,597 as of 12:13 AM ET (04:13 GMT).

Fed Chairman Jerome Powell caused confusion and eventually a major sell-off in the US stock markets suggesting first the cut might be the only cut and then saying there could be more.

Powell at his press conference stressed that rising trade tensions have led many businesses to stall investment decisions.

He then suggested that the cut be made one and done, saying the rate cut was merely a “middle cycle adjustment”. Then, he said there could be more cuts.

Powell said “It’s not the start of a long series of rate cuts,”. At the same time, he said, “I didn’t say it’s just a reduction of one rate.”

The pound continued its downward momentum as investors rushed to substantiate Britain’s ability to leave the European Union without a deal.The GBP / USD pair fell 0.3% to 1.2125.

Britain’s new Prime Minister Boris Johnson has pledged to pull the country out of the EU by October 31, whether or not there are trade transition agreements.

The USD / JPY pair traded 0.4% higher at 109.18.

The AUD / USD pair and the NZD / USD pair increased 0.1%.forex

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