Hello traders, welcome to post-FOMC Thursday. Everything is now clear after yesterday’s Fed decision. The U.S. central bank delivered a 25-basis-point cut, in line with expectations, and laid out its outlook for the coming years: two more cuts anticipated by the end of 2025, one cut in 2026, another in 2027, and no further moves in 2028.
The market reaction was textbook. Initially, the U.S. dollar weakened, but the move was quickly reversed, and the greenback surged to reclaim its throne as the strongest currency in the pack. This kind of whipsaw is nothing new after FOMC days — the first knee-jerk reaction often fades, paving the way for a powerful move in the opposite direction. At the start of Thursday’s European session, the dollar remains dominant. The Canadian dollar is also firm, while the clear underperformers are the antipodeans. The New Zealand dollar, in particular, took a heavy hit after a deeply disappointing GDP reading of –0.9%. Job data from Australia also missed expectations, compounding weakness across the region.
On the commodities front, the strong dollar is weighing heavily. Metals are struggling, and oil is plunging, erasing earlier optimism. Indices, meanwhile, showed a classic FOMC whipsaw. Stocks fell sharply right after the Fed announcement but then bounced, and during the Asian session, U.S. futures even touched long-term highs. Ahead of Europe’s open, we see some corrective pressure, but overall sentiment remains cautiously positive.
Cryptocurrencies also joined the party. Bitcoin and Ethereum surged post-FOMC to fresh mid-term highs, though they are now undergoing a modest correction before the European cash market opens.