The US dollar wasn’t having a good day prior to the announcement from the Federal Reserve on its programme on quantitative easing and once it was announced that they weren’t going to start tapering it lost ground very very quickly against all major currencies. There seems to have been two key factors at play. The US economy isn’t doing as well as hoped for and interest rates have started to increase to unacceptable levels. Hence the decision to keep the programme of cheap money going for the time being. This highlights the danger of central bank “guidance” if all the variables aren’t fully understood by either the central bank and/or the markets. Following on from this, today’s important releases are the unemployment claims figure, a highly influential economic indicator, and the existing home sales. Call your trader now for the latest price on the US dollar, as the fallout from last night continues.