US Dollar turns negative post-FOMC, around 92.40

• The index gave away gains and drops to the 92.40 area.
• US 10-year yields returns to lows near 2.96%.
• FOMC left monetary policy unchanged, sees inflation close to 2%.

The greenback, in terms of the US Dollar Index (DXY), has eroded its daily gains and dropped to the 92.40 region following the steady stance from the FOMC at today’s meeting.

US Dollar offered post Fed-event

After clinching highs beyond the 92.60 region earlier in the day, the index has given up those gains and retreated to the negative territory following the FOMC meeting.

The Committee voted unanimously to leave the overnight rate unchanged at 1.50%-1.75% today, broadly in line with initial forecasts.

Members now see US inflation has moved close to the Fed’s 2% goal and it is expected to stay near ‘symmetric’ target over the medium term, hinted at the likelihood that the Fed could allow some overshooting.

The FOMC also see the economy warranting further gradual hikes while risks to the economic outlook appear ‘roughly balanced’. Members noted the jobs gains are remain strong on average and the economic activity is seen as moderate.

The index moved lower following the FOMC’s statement, giving away some gains although managing to keep business above the critical 92.00 handle.

US Dollar relevant levels

As of writing the index is losing 0.12% at 92.36 facing initial contention at 91.97 (200-day sma) seconded by 91.70 (50% Fibo of 95.15-88.25) and finally 91.29 (10-day sma). On the upside, a breakout of 92.72 (high May 2) would open the door to 93.68 (78.6% Fibo of 95.15-88.25) and then 94.22 (high Dec.12 2017).