<p>The probability of 50 bps cut was non-zero:</p>

<p><a href="https://i.sstatic.net/oW7eO.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/oW7eO.png" alt="https://www.dailyfx.com/forex/market_alert/2019/07/25/usd-us-dollar-turns-to-gdp-data-fed-rate-cut-bets.html"></a></p>

<p>In addition, the Fed's statement afterwards is seen as "hawkish" in the sense that the forward guidance doesn't say the Fed will continually cut the rate. <a href="https://www.dailymaverick.co.za/article/2019-08-01-dollar-bears-and-trump-both-dealt-blows-by-feds-hawkish-cut/" rel="nofollow noreferrer">https://www.dailymaverick.co.za/article/2019-08-01-dollar-bears-and-trump-both-dealt-blows-by-feds-hawkish-cut/</a></p>

CC BY-SA 4.0
2019-08-01T05:00:47.890Z
2019-08-01T05:00:47.890Z
Art
<p>I was following the Fed’s decision on interest rates. I thought if there is an interest rate cut, the EUR/USD will go up but contrary to that it went down on 07/31/2019 immediately after the decision to lower interest rates. Some sites claim that the Fed didn't cut enough (50 basis points) as opposed to the actual cut of 25 basis points. I have been following the news for almost 3 months and no one expected a 50 basis point cut. Is there something I am missing?</p>

CC BY-SA 4.0
2019-08-01T01:11:04.833Z
Foreign exchange is a market. If exchange rates followed simple rules like “rate cut means that the exchange rate goes up”, it would be very easy to make money. Since trading is zero sum, that means there are people who are losing money being on the wrong side of the simple rule. Since nobody is going to volunteer to do that, the simple rules are not reliable. As a result, I doubt that there’s a good answer to your question.
Brian Romanchuk
CC BY-SA 4.0
2019-08-01T05:02:37.040Z
@BrianRomanchuk It would be very easy to make money given that other people don't react to the information before you do. That's how a lot of price movements happen. Simple rules... earnings beat, court decision, etc. You just need to react fast enough.
Art
<interest-rate><federal-reserve>
Why did the EUR/USD go down immediately when the Fed cut interest rate?
Vinay
# Why did the EUR/USD go down immediately when the Fed cut interest rate?

(Asked by: username_0 on 2019-07-31)

I was following the Fed’s decision on interest rates. I thought if there is an interest rate cut, the EUR/USD will go up but contrary to that it went down on 07/31/2019 immediately after the decision to lower interest rates. Some sites claim that the Fed didn't cut enough (50 basis points) as opposed to the actual cut of 25 basis points. I have been following the news for almost 3 months and no one expected a 50 basis point cut. Is there something I am missing?

**Tags:** interest-rate, federal-reserve

> **Comments:**
> **username_1**: Foreign exchange is a market. If exchange rates followed simple rules like “rate cut means that the exchange rate goes up”, it would be very easy to make money. Since trading is zero sum, that means there are people who are losing money being on the wrong side of the simple rule. Since nobody is going to volunteer to do that, the simple rules are not reliable. As a result, I doubt that there’s a good answer to your question.  
> **username_2**: @BrianRomanchuk It would be very easy to make money given that other people don't react to the information before you do. That's how a lot of price movements happen. Simple rules... earnings beat, court decision, etc. You just need to react fast enough.  

---

## 1 answers

### Answer by username_2 on 2019-08-01. Score: 1 | Accepted answer

The probability of 50 bps cut was non-zero:

[![https://www.dailyfx.com/forex/market_alert/2019/07/25/usd-us-dollar-turns-to-gdp-data-fed-rate-cut-bets.html](https://i.sstatic.net/oW7eO.png)](https://i.sstatic.net/oW7eO.png)

In addition, the Fed's statement afterwards is seen as "hawkish" in the sense that the forward guidance doesn't say the Fed will continually cut the rate. <https://www.dailymaverick.co.za/article/2019-08-01-dollar-bears-and-trump-both-dealt-blows-by-feds-hawkish-cut/>


---

