FX round-up: No change at the Fed adds to dollar weakness

The release of the FOMC statement overnight saw a rise in cable on Thursday, although the Fed brought little in the way of surprise with regards to their stance on key interest rates, which were left unchanged at 1.25%.

It stated that the actual path of the federal funds rate would "depend on the economic outlook as informed by incoming data," but admitted that inflation on a 12 month basis was "expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term."

What that meant for the sterling-dollar pair at the time of the release was a surge higher from 1.3050, to an overnight high of 1.3158 by 0400 BST.

The UK trading session ran into heavy resistance at the 10 month high of 1.3158 as at 1100 BST, and was forced lower either by stops activating or fresh sellers entering the market.

Cable since posted a low for the day of 1.3063 by 1700 BST, down 0.46%.

In terms of economic data, the only saving grace for the US came in the form of durable goods orders with a print of 6.5%, beating the forecast consensus of 3.5%.

The euro went much the same way against the dollar overnight and comfortably achieved a two year high of 1.1776 by 0400 BST, but went the same way as cable once those highs were seen and was trading at the day low of 1.1661 by 1700 BST, down 0.56%.

The single currency had found strength since the start of this year and benefited from a weaker dollar, as well as expectations that the European Central Bank will tighten monetary policy.

USD/JPY seemed to benefit most from dollar weakness last night, trading at 112.00 prior to the FOMC statement release and posting an overnight low of 110.79 by 0400 BST.

UK trading saw the pair recover just over half of the overnight losses by 1600 BST trading at 111.62, up 0.43%.