NZD/USD soars to 0.6910 as the US dollar falls sharply on “patient” Fed

• Fed leaves rates unchanged and moves to a “patient” stance. 
• Chairman Powell reinforces the dovish shift. 
• US Dollar tumbles and NZD/USD jumps to highest since early December. 

The NZD/USD pair gained 80 pips during the last minutes following the release of the FOMC statement and during Powell’s press conference. The pair rose from 0.6835 and peaked at 0.6910, the highest level in more than a month. As of writing, is holding above 0.6900, keeping a strong bullish tone. 

The driver of the rally was a sharp decline of the US dollar across the board. The Fed offered no signals about a rate hike soon and said it would be patient. Also announced it is ready to adjust the balance sheet normalization in light of economic and financial developments. During the press conference, Powell said they had seen cross-currents and conflicting signals. The case for raising rates has weakened somewhat, Fed’s Chair mentioned. He added that inflation pressures are muted.  

The greenback reached fresh lows with Powell’s comments and kept the NZD/USD near daily highs, holding to daily gains. If it remains firm above 0.6900, it could rise to the next strong resistance seen at 0.6950.