The U.S. Dollar tanked across the board of all other major currencies on Wednesday afternoon as the FOMC held a press conference providing directions for the state of the U.S. economy.
The U.S. Dollar not unsurprisingly took a bearish stance and sold off from a combination of factors.
1. Feds remain cautious announcing further increase would be gradual
Currently, the outlook remains consistent with two more rate hikes this year and three more in 2018. Many were concerned that the Feds would take accelerated actions, but so far they have remained cautious. In the FOMC press conference, the Feds have continued to emphasized that the two percent target is not a ceiling and inflation can fluctuate above or below that level.
2. March rate hike said to be 100% priced in triggering greater take profit
The EURUSD pair soared 1.24% on Wednesday with the other major pairs acting accordingly. The sell-off of the U.S. Dollar was also contributed by record net-long positions and the aggressive take profits demonstrated in the market.
3. Assessments of near-term risks
President Donald Trump continues to fail to objectively announce policies regarding trade agreements and taxation. These two factors pose economic growth risks as protectionist policies may limit expansion and inflation growth.