Forex Commentary: Fed’s Statement Fails To Fuel US Dollar Rally

The U.S. Dollar erased earlier losses after the Federal Reserve released its monetary policy statement. The Dollar turned higher after trading most of the day lower after the Federal Open Market Committee offered more detailed plans to remove excess liquidity from the financial system.

The Fed also offered commentary on the economy, saying that deterioration in the labor market is “abating.” This statement is a reaction to the decline in the unemployment rate earlier in the month from 10.2% to 10.0%. The Fed did reiterate, however, that it will keep its benchmark interest rate at a historically low level for “an extended period.”