USD slightly eased but quickly recovered as the Fed begins to taper, stocks closed at record highs

USD eased on Wednesday after the Fed said it would begin unwinding its pandemic stimulus. But Fed still held to its belief that high inflation was only transitory and likely did not require an interest rate hike. The Fed announced a $15 billion monthly cut to its $120 billion in monthly purchases of treasuries and mortgage-backed securities but did little to signal when it may begin the next phase of policy “normalization” by raising interest rates. The dollar index softened after the Fed statement, hitting a session low before reversing some of the losses. Currently, it is trading at 94.028, up about 0.2%.

Stocks in the US firmed on Thursday after the announcement as investors felt more secured that the Fed was not in a rush to raise the rates. Nasdaq futures rose 0.2% to another record high. Japan’s Nikkei also climbed more than 0.7% and touched its monthly high.