USD/JPY dips to fresh multi-month lows at 103.50 as Fed's Powell speaks

• USD/JPY ticks lower to hit fresh to seven/month lows at 103.50.
• Powell's dovish comments increase negative pressure on the US dollar.
• The greenback tumbles across the board with stock markets surging.

The US dollar is ticking lower through fresh 6, 1/2 -month lows at the mid-range of 103.50 as the Federal Reserve President holds its press release after November’s monetary policy decision.

The Fed stands pat

The Federal Reserve has kept its benchmark interest rate unchanged at the 0% - 0.25% range as well as its target for asset purchases and has reaffirmed its commitment to support US economy “promoting its maximum employment and price stability goals” against the impact of the COVID-19 pandemic.

The monetary policy statement affirms that the economic activity and the employment levels have continued recovering although they remain at levels well below those at the beginning of the year. The Bank also warns that the weaker consumer demand and the falling oil prices are holding down consumer inflation.

Fed President Jerome Powell’s statement has been tilted to the dovish side, as his opening statement affirmed that “the pace of improvement has moderated”. Although he observed that economic activity continued to recover, he also alerts about the highly uncertain path ahead, which might have increased negative pressure on the USD.

The dollar has remained on the back foot on Thursday, extending its reversal from Wednesday’s highs at 105.35 with equity markets rallying as the Democrat candidate Joe Biden edges closer to the victory in the US presidential elections.

The market is welcoming the possibility of Biden’s presidency with the Republicans in control of the Senate to block any attempt to tighten regulations or raise taxes to Corporate America.

Technical levels to watch