Talking Points:
• While the Fed held its benchmark ranch, it insinuated heavily that a hike in December was still an option
• A rally from the Dollar finds gearing versus dovish counterparts, but USDollar faces major technical boundary
• The next 48 hours is a laundry list of key event risk: US GDP, BoJ decision, Eurozone Inflation and more
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The Dollar was this past session's top performer amongst the majors thanks to the Fed. While the central bank didn't change rates at this month's meeting, it significantly challenged the market's expectations by keeping a December hike in in the offing. In a landscape where most major policy groups are moving increasingly to a dovish stance, the Fed's obstinate push towards normalization is inherently hawkish. The question is how much more premium this particular policy outcome warrants. For the Dow Jones FXCM Dollar Index, the rally has put the currency at the doorstep of a 12 year high. A significant repricing would likely be needed to break that boundary much less carry it readily beyond. Alternatively, pairs like EURUSD offer serious fundamental divergence and aren't offer more room for technical reach. We discuss the Dollar's positioning, major event risk ahead (US GDP, BoJ, China's Plenum wrap and more) and market activity levels in today's Trading Video.
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