As expected, the FED came through with their plan to up the overnight borrowing rates to 1% from the previous 0.75%. While this was nothing out of the ordinary, the USD price went down sharply after the announcement. The USD Dollar Index – a measurement of the strength of the American currency versus a basket of other foreign currencies went down shortly after the news broke out. It now stands at 100.09, a decrease of 1.33% from previous levels. The Dollar has also lost value against the Euro (-1.22%), Yen (-0.95%) and the Loonie (-0.98%). At the same time the gold went up 2.1% against the Greenback. A few reasons could be pointed out, such as a lack of change in rate projections, no change in the near future economic outlook, as well as an increase in the price of the corresponding currencies themselves. By current projections, 2 more rate hikes are to be made this year and it remains to be seen if the measures can reassure the market that the taken steps are the correct ones or if the USD will continue to fall.


Other centrals banks held meetings for their own rates, but none of them made any changes. The Bank of Japan (BOJ) held their current rate at -0.1%, the Bank of England's (BOE) rate was kept at 0.25%, while the Swiss kept the LIBOR rate at -0.75%.


The next focus is the G20 meeting. President Trump will have the chance to meet with Germany Councellor Merkel, together with Treasury secretary Mnuchin and Germany's Schaeuble. The highlight of the summit is the Free trade agreements that Germany wants to push for where a list of about 10 principles on how a "well performing economy" should act on areas of fiscal, monetary and trade policies will be brought up.