AUD/USD jumps above 0.6600 as Fed shock markets with a 50bps rate cut

• US dollar drops sharply across the board after Fed cut rates. 
• AUD/USD extends gains, having best performance in months. 

The AUD/USD pair jumped from 0.6580 to 0.6636, reaching the highest level since February 21 after an emergency rate cut from the Federal Reserve. 

The US central bank announced a 50 basis rate cut in an unscheduled meeting. The decision was unanimous. According to the Fed, the coronavirus exposes evolving risks to economic activity. 

The DXY tumbled after the announcement and dropped to test the 97.00 area. It trades at 97.04, the lowest in almost two months and it heads to the fourth decline in a row. The decision boosted equity markets. Wall Street indexes reached new highs but then lost strength trimming gains. 

The improvement in risk appetite and the decline of the greenback sent AUD/USD sharply higher. Now the pair is extending the recovery from the decade low hit last week at 0.6432. Since then it has risen almost two hundred pips. 

As of writing, AUD/USD trades at 0.6630, near the 20-day moving average that stands at 0.6640. At 16:00 GMT Chairman Powell will offer a press conference, so volatility is likely to remain high. Analysts will look for hints about what the Fed will do at the next FOMC meeting. 

Technical levels