FX.co ★ Instant reaction to the Fed's decisions: the dollar collapsed, the stock market rushed down

On Wednesday, the US dollar began to significantly sink amid the decision of the United States Federal Reserve (Fed) to leave its policy unchanged.

So, the dollar index (the dollar's exchange rate against a basket of currencies of six countries – the main trading partners of the United States) updated two-month lows around the level of 90.50.

Following the results of the two-day April meeting, the Fed left unchanged interest rates and the volume of the bond purchase program ($120 billion per month). The regulator noted that it plans to support the economic recovery until it is completely rid of the consequences of the coronavirus pandemic.

In addition, the representatives of the Federal Reserve stressed the significant improvement in economic activity and employment indicators due to the high rate of vaccination of the population against COVID-19.

As for a number of negative aspects in the economy, Fed Chairman Jerome Powell stressed that the recent increase in the rate of inflation was due to the impact of temporary factors, so for the process of curtailing the Fed's asset purchases, further tangible improvement in the economic situation is necessary.

Since the beginning of this year, the American economy has been gaining momentum thanks to progress in vaccination, the partial or complete lifting of economic restrictions, as well as a new wave of government payments that significantly support consumer spending.

The next meeting of the Federal Reserve, aimed at resolving monetary policy issues, is scheduled for June 15-16.

Major US stock indexes on Wednesday also immediately reacted to the statements of representatives of the regulator. Stock market indicators began to fall steadily after the Federal Reserve's statement on the decision to maintain a soft monetary policy, contributing to the rally in the stock market.

So, the S&P 500 index sank by 0.1% to 4,183.18 points. Throughout the trading session, the stock index balanced between a slight rise and fall, finally choosing to decline after the Fed announced its decision to keep the main rate at close to zero.

Meanwhile, the Dow Jones Industrial Average fell by 0.5%, reporting a level of 33820.38 points. The Nasdaq Composite index lost 0.3% and settled at 14051.03 points.

This week, stock market participants are watching the financial statements of the tech giants.

Thus, Alphabet securities increased in price by 3.0%. The other day, the California holding company reported record sales for the 1st quarter.

Shares of Boeing, the global manufacturer of aviation, space and military equipment, lost 2.9%, which immediately affected the performance of the Dow Jones index. Recall that the company finished the seventh quarter in a row with a minus.

Quotes of the Internet audio streaming service Spotify fell by 12.0% after the company announced a slowdown in the number of users in the 1st quarter.

Shares of the American manufacturer of semiconductor devices, chips, and electronics Texas Instruments sank by 4.4% after the company warned that revenue for the 2nd quarter will be lower than predicted by experts.

Analysts note that at the moment, the markets react to the reporting of giant corporations quite moderately.