Markets had expected the 75 basis point hike and priced in several more after a surprisingly hot inflation reading last week.
It last traded at $1.0464 per euro, while in the Asia session the Australian dollar tacked another 0.4% on to its almost 2% overnight surge to hit $0.7031.“Today’s 75-basis-point increase is an unusually large one,” Powell told reporters. “I do not expect moves of this size to be common,” he said,though adding that next month either a 50 bp or 75 bp hike was likely.
That, however, was met with initial relief as it was a bit lower than the 4%-and-above that futures markets had implied earlier this week. A small dip on the yen was already being unwound on Thursday morning as the Fed’s tone is in stark contrast with the Bank of Japan’s redoubling of efforts to pin interest rates near zero.The Bank of Japan meets on Friday amid a speculative attack on its yield-curve-control policy that has made for erratic trade in Japanese government bonds this week.
Can someone (please) explain what this means.