EUR/USD: Dollar Sells Off After Fed Skips Hiking, Projects Three Rate Cuts in 2024

A solid 0.75% chunk is likely to get trimmed off the current 5.25% to 5.50% Fed benchmark interest rate next year. Euro topped $1.09.

• The EURUSD pair leaped higher on Wednesday, after the Federal Reserve concluded its two-day meeting with a bang. Fed boss Jerome Powell said the central bank will not be hiking its benchmark rate. And more than that, Fed officials are planning a solid 0.75% cut to borrowing costs in 2024.
• Currency speculators cheered the announcement by pumping the euro to levels above $1.09, or a 120-pip increase on the day. The dollar, in contrast, sold off across the board as lower US interest rates generally mean traders will look outside the greenback for gains.
• With that in mind, the European Central Bank decides its rate stance today. So does the Bank of England. Both are set to leave rates unchanged. But what officials say could have a big impact on FX markets. Brace for shifting volatility today as the week of central-bank decisions moves in full swing.