- past data is 0.25%
- forecast data is 0.25%
- actual data is 0.25% according to the latest press release
if actual > forecast (or actual data) = good for currency (for USD in our case)
[USD - Federal Funds Rate] = Interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight. Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
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"To support continued progress toward maximum employment and price
stability, the Committee today reaffirmed its view that a highly
accommodative stance of monetary policy will remain appropriate for a
considerable time after the asset purchase program ends and the economic
recovery strengthens. The Committee also reaffirmed its expectation
that the current exceptionally low target range for the federal funds
rate of 0 to 1/4 percent will be appropriate at least as long as the
unemployment rate remains above 6-1/2 percent, inflation between one and
two years ahead is projected to be no more than a half percentage point
above the Committee's 2 percent longer-run goal, and longer-term
inflation expectations continue to be well anchored. In determining how
long to maintain a highly accommodative stance of monetary policy, the
Committee will also consider other information, including additional
measures of labor market conditions, indicators of inflation pressures
and inflation expectations, and readings on financial developments. The
Committee continues to anticipate, based on its assessment of these
factors, that it likely will be appropriate to maintain the current
target range for the federal funds rate well past the time that the
unemployment rate declines below 6-1/2 percent, especially if projected
inflation continues to run below the Committee's 2 percent longer-run
goal. When the Committee decides to begin to remove policy
accommodation, it will take a balanced approach consistent with its
longer-run goals of maximum employment and inflation of 2 percent."
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EURUSD M5: 42 pips price movement by USD - Federal Funds Rate news event :