The FOMC statement said more of the same – labor market continues to strengthen, jobs are solid, household spending is rising moderately though business fixed investment remains soft. There has been a slight increase in inflation though keep an eye on December figures after the recent drop in oil prices as the increase in inflation was mostly due to low energy prices. Rates remain on hold. Continued improvement in the labor market and a continued move towards 2% inflation will determine a future hike. What’s interesting is that there were only two members for a hike vs. three last time with Rosengren voting on hold. The Fed Watch Tool indicates a 71.5% chance of a rate hike in December. We have high impact news releases this afternoon during the NY session though I will provide an update on that in my NY forecast.
I am keeping an eye on several USDollar pairs. Fundamentally nothing has changed since yesterday and the election risk event has not happened so there is no reason for USDollar to strengthen though I am a USDollar bull so I am always paying careful attention to any indication that strength is returning to the market. I have shared some of my observations below, at such time as I get further confirmation I will upload an update to this post. Take note of the Pound news coming out later today. If the result of that news is bullish for Pound we will see Dollar weaken. Not a great week for USDollar bulls though our opportunity will arrive soon.