Post FOMC: As you were

<p>The dollar trades with a bid tone following the FOMC which is being perceived as slightly hawkish by most commentators, despite the cautious tone with regards […]</p>

The dollar trades with a bid tone following the FOMC which is being perceived as slightly hawkish by most commentators, despite the cautious tone with regards to the inflation outlook. The committee commented that ‘inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices’, but with changes to the language from ‘moderate’ to solid in relation the US growth assessment, jobs gains were described as ‘strong’.

The committee also reiterated that the decline in energy price was good for the US economy, adding that the lower cost had ‘boosted household purchasing power’. The muted reaction in Asia has seen the Euro reclaim a 1.12 handle, following the position adjustment squeeze  to 1.1425 on Tuesday.

The RBNZ joined the recent dovish Central Bank mantra overnight as the New Zealand Central Bank removed its tightening bias, citing potential drags on growth that include an overvalued New Zealand dollar. The inflation outlook was also described as being negative for a prolonged period. The NZD has subsequently traded 2% lower following the announcement.

The data highlight of today will be the German inflation data at 1pm (UK time), although I suspect the reaction to a weaker number will have less impact following the ECB QE action last Thursday.



Supports  1.1260-1.1200-1.1100  | Resistance 1.1340-1.1370-1.1430



Supports  117.20-116.80-116.50  Resistance  118.50-118.90-119.30



Supports  1.5080-1.5000-1.4950  Resistance  1.5235-1.5280-1.5350

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