The Greenback soars to a 27-month high

Daily Currency Update

USD - United States DollarThe Fed made a "hawkish" rate cut pushing the Greenback to a 27-month high. The Fed put cold water on dovish expectations, despite the Fed cutting rates after ten years. Market participants trading the U.S dollar got a reality check on the growth prospects of the Greenback against other world currencies. It is not unusual that market participants get it wrong when they factored in multiple rate cuts by the Fed, but Chairman Jerome Powell reset expectations about the direction of U.S. monetary policy versus the rest of the world. Chairman Powell managed to give markets a thrill, even though the quarter-point cut he delivered was far from surprising. He discouraged market participants from betting on a longer-term easing cycle, saying the modest cut was meant to protect the economy's expansion in a time when uncertainty around trade policy has been, "more elevated than we anticipated," making the equity market fall and the U.S. dollar rise. Despite that President Trump got the modest rate cut he had been asking for since March, he was not pleased. He said "as usual, Powell let us down," in a tweet, as he had hoped for a more aggressive cut to fight the trade and currency battles. Trump will probably be more worried now that the EUR/USD pair is touching a new 27-month low, and the European Central Bank seems to look at their own paths to easing. The next critical piece of information will be published tomorrow, when the July jobs report is due. This will set the tone for the pace of activity in the second half of the year. At the time of this writing, the U.S index is rising over 0.2 percent.