US dollar fell 0.7% after interest rate decision
The US dollar index has been on a downtrend since the FOMC (Federal Open Market Committee) meeting on January 27, 2016, when the members decided to keep the interest rate unchanged. The US dollar index fell 0.70% from a high of 99.4 to near 98.4 levels.
The core durable goods data, which were released a day after the FOMC meeting, also disappointed, causing a further fall in the dollar index. The US dollar index ended January 28, 2016, at 98.6, with the US advanced GDP (gross domestic product) release on January 29 to give further direction to the index.
FOMC and other domestic data
The Fed decided to keep the interest rate unchanged between 0.25% and 0.5%. It was of the view that the increase in interest rates will happen at a gradual pace after looking at the global happenings. The overall tone of the statement was a dovish one, resulting in the fall in the US dollar index.
The Fed acknowledged that economic growth has slowed down and inflation continues to be below the targeted levels. The United States Census Bureau published the core durable goods order for the month of December. It came out at -1.2% against an expected fall of 0.1%.
Impact on the market
Looking at ETFs, the broad-based SPDR S&P 500 ETF (SPY) rose by 0.52% on January 28, 2016. The WisdomTree Bloomberg US Dollar Bullish ETF (USDU) encompasses developed economies and emerging market currencies. It fell by 0.18%.
Banking stocks in the US market were trading on a negative bias on January 28, 2016. JPMorgan Chase (JPM) continued to be on an upward trajectory, rising 0.42%. Citigroup (C) saw a fall of 0.30%. In contrast, Wells Fargo (WFC) was following a positive trajectory with a rise of 0.72%.