Trading Video: Dollar Reaction to FOMC Reserved, S&P 500 Takes a Hit
• Following the ECB's introduction of a new QE program last week, the FOMC maintained its path to a hike
• Both Dollar and 'risk trends' were slow to respond to the news, but the outcome will carry through
• Meanwhile, the once most hawkish central (RBNZ) turned surprisingly dovish
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Short-term volatility was surprisingly restrained this past session given the significant fundamental developments. Don't expect the market's to remain staid for long. Top event risk was the news that the Federal Reserve was maintaining its optimism for growth, a return of inflation pressure and 'patience' on the timing for the first rate hike. While that seems non-committal, in the context of a meaningfully more dovish global central banking system, it is a serious stance. The impact however, may carry more impact over time for general risk trends than it does for just the Dollar. Meanwhile, another central bank decided to follow the majority - and draw a deeper contrast to the Fed - when the RBNZ dropped its views for a rate hike. What fundamental trends should we read for EURUSD, NZDUSD and EURJPY going forward? We cover that and more in today's Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.