- AUD/USD hits fresh 7-week highs at 0.6550 after the Fed’s decision.
- The USD loses ground on Fed Powell’s press release.
- The Federal Reserve maintains its dovish rhetoric and pledges to whatever it takes.
The Australian dollar is crawling higher, as the USD loses ground against its main peers after the Federal Reserve disclosed its monetary policy statement.
The AUD/USD has extended its uptrend from last week’s lows at 0.6250, to hit fresh seven-week highs at 0.6550 although, so far, the pair seems unable to consolidate above previous high at 0.6540.
The Fed commits to whatever it takes
The Federal Reserve has kept its target rate unchanged at 0%-0.25% on its April’s monetary policy meeting and has pledged to use “its full range of tools to support the US economy.”
The Bank reiterated the risks of the COVID-19 shock to employment and inflation in the near-term and to the economic outlook in the medium-term. In this context, the MPC confirmed that the target rate will remain near zero “until the economy has weathered recent events” and is on track to achieve maximum employment and price stability.
Regarding monetary measures, the Bank reiterated its commitment to continue buying Treasury securities and agency residential and commercial mortgage-backed securities to support the flow of credit to households and businesses. Besides, the Open Market Desk will continue offering large-scale overnight and term repurchase operations, monitoring closely market conditions and ready to adjust plans as appropriate.
AUD/USD key levels to watch