Daily Market Analysis

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The US Federal Reserve has finally raised interest rates and ended its long-standing Zero Interest Rate Policy (ZIRP); this in itself should leave the US Dollar well-positioned versus major counterparts through the start of 2016. And indeed the Fed’s hike stands in sharp contrast to the European Central Bank, which moved to cut interest rates just a week before the FOMC decision. Market reactions to both the ECB and the Fed are nonetheless telling—the Euro rallied sharply as the ECB’s rate cut was less aggressive than feared, while the US Dollar was mostly unchanged following a lackluster Fed announcement.