On the economic agenda today, the Federal Reserve meeting raised interest rates as expected to 1.25%, while maintaining expectations of a further rise this year, indicating that the labor market will continue to improve and the economy grew at an moderate pace and that the interest rate will be determined by economic data.
Federal Reserve Governor Janet Yellen confirmed that the rate hike was based on growth in the economy and that the rate hike is expected to be gradual over the coming years. In a sign of inflation, Yelen believes it will stabilize near 2% and will be monitored closely.
About the budget, the Fed expects to implement its plan to reduce it this year initially by reducing its holdings of treasury bonds by 6$ billion per month and 4$ billion per month for mortgage-backed securities.
The US dollar was broadly higher against most of its rivals, with the USDJPY rising significantly and currently testing the 12 June low at 109.75. The EURUSD dropped strongly after testing a resistance level of 1.1280 to reach the 1.1210 levels currently.
Before the announcement of the Federal Reserve's decision, US inflation data came as a surprise to disappoint markets after falling 0.1% in May, while retail sales posted their biggest 16-month drop unexpectedly and fell 0.3% in May.
Earlier in the morning, China's industrial production data showed steady growth in May, signaling stability in the world's second-largest economy. Industrial production rose 6.5%, but fell from a 7.6% year high in March.
In Britain, speculation has grown that the Bank of England tends to keep interest rates unchanged in the short term in light of weak wage rates, which will have an impact on consumer spending, and in the context of labor market data continued to show further improvement.
Oil prices fell sharply following the drop in oil inventories during the week ending June 9 by 1.7 million barrels, after an increase of the previous week by about 3.3 million barrels. Prices fell from their daily highs of 46.46$ a barrel, hitting their lowest level since May 5 at 44.52$ a barrel.
