The Dollar tumbled across the board on Tuesday after the Federal Reserve shocked financial markets with an emergency 50 basis point rate cut.
It's the first unscheduled, emergency rate cut since October 2008, and it also marks the biggest one-time cut since then.
According to the Fed, "the fundamentals of the U.S economy remain strong. However the virus poses evolving risks to economic activity”. This move is likely to open doors to further cuts in the future as the Fed attempts to shield the US economy from the negative impacts of the coronavirus outbreak.
In regards to the technical picture, the Dollar Index tumbled following the emergency cut with prices trading around 97.13 as of writing. A breakdown below 97.00 should encourage a decline towards 96.75.
USDJPY sinks below 107.49
The emergency US rate cut sent the USDJPY tumbling below 107.49 on Tuesday afternoon. A weaker Dollar could drag prices towards 106.60.
Gold punches above $1620
Gold prices are pushing higher this afternoon following the rate cut. The prospects of lower interest rates in the United States and across the globe should push the precious metal higher with a softer Dollar complementing upside gains.
A daily close above $1620 could open the doors towards $1660.
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