US Dollar pushes higher above 99 after FOMC statement

After spending a big portion of the day below the 99 level on Wednesday ahead of the Fed's policy decision, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, spiked to 99.03 and quickly reversed its course and dropped to a fresh session low at 98.85. However, as the policy statement adopted a somewhat optimistic tone, the index moved back above 99 and is now at 99.08, up 0.3% on the day.

As expected, the Committee decided to maintain the target range for the federal funds rate at 0.75% to 1%. The Committee explained that in determining the timing and size of future adjustments to the target range for the federal funds rate, realized and expected economic conditions relative to the objective of maximum employment and 2% inflation will be assessed.

Regarding the inflation, the statement highlighted that the consumer prices declined in March and inflation continued to run somewhat below 2%. Furthermore, despite a slowdown in the economic activity, the labor market has continued to strengthen, according to the Committee.

• FOMC's decisions regarding monetary policy implementation - May 3, 2017

If the index is able to sustain its bullish momentum, it could target 99.75 (Mar. 23 low) ahead of 100 (psychological level) and 100.50 (Apr. 17 high). To the downside, supports align at 98.75 (May. 1 low), 98.30 (Nov. 10 low) and 98 (psychological level).