Forex Today: The Fed could not save the US Dollar

What you need to take care of on Thursday, December 15:

The American Dollar remains on the back foot after the US Federal Reserve announced its monetary policy decision. Financial markets were pretty much on hold ahead of the event, with major pairs confined to tight intraday ranges.

The central bank delivered a 50 basis point rate hike as widely anticipated, while the accompanying statement was pretty much a copy of the previous one.

On guidance, the document showed that "the Committee anticipates that ongoing increases in the target range will be appropriate." Additionally, the Fed's revised Summary of Economic Projections (SEP), the so-called dot plot, showed that the median view of the policy rate at the end of end-2023 stood at 5.1%, up from 4.6% in September's SEP. Finally, growth forecasts have been downwardly revised for 2023 and 2024, while PCE inflation was upwardly revised to 3.1% from 2.8% for 2023, also adjusted to the upside in 2024 and 2025.

Chairman Jerome Powell came out with hawkish comments. Among other things, Powell noted that the ultimate level of rates is more important than how fast they go, adding that the FOMC needs to hold rates at their peak until policymakers are "really confident" inflation comes down in a sustained way.

Finally, he said that the focus remains on moving the policy stance to become restrictive enough, not on rate cuts. His words take their toll on equities, with US indexes plummeting but the dollar barely able to post a short-lived advance. The movements were short-lived, as the greenback quickly resumed its decline as stocks bounced off their lows.

Meanwhile, US Treasury yields edged marginally lower after ticking higher post-Fed.

EUR/USD trades just ahead of the 1.0700 figure, while GBP/USD stands at 1.2430.

The AUD/USD pair flirted with 0.6800 but trimmed losses and hover around 0.6860 ahead of Australian and Chinese first-tier figures. Australia will publish November employment figures on Thursday. The country is expected to have added 19,000 job positions in the month, while the Unemployment Rate is foreseen unchanged at 3.4%. The Participation Rate, however, is expected to have ticked higher, from the current 66.5% to 66.6%. The country will also release December Consumer Inflation Expectations, foreseen at 5.7%, declining from 6% in November.

The USD/CAD pair is down to 1.3545, helped by stronger oil prices. The barrel of WTI currently stands at $77.35.

Gold ended the day little changed at around $1,807 a troy ounce.

Early on Thursday, the focus will be on the Bank of England's and the European Central Bank's monetary policy decisions.