The Fed is not hiking rates, not even looking to hike rates soon. That should come as no surprise to traders.
What they are doing however, is looking to reinvest their proceeds from mortgage backed securities into treasuries.
The Fed sees inflation as subdued and the economy as fragile but still recovering, if not slower than expected.
This news is dollar negative. The fed is seeing slower recovery and they will be buying treasuries to keep things moving along. Regardless of this, the dollar seems to be approaching a cyclical low, so the dollar sell off may be short lived over the next week.
Notably all of the FOMC actions were opposed by Thomas Hoenig who sees the economy as recovering modestly and prefers for the FOMC to move away from the exceptionally low rates that keeps their options reduced for the future.