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From the Floor: Janet Yellen's muted goodbye — #SaxoStrats

  • Damp squib FOMC outing sees expected hike, but USD drops
  • Gold in focus as it normally gains following Fed rate hikes
  • Copper recovering, platinum discount to gold hits record
By Michael McKenna

Wednesday's Federal Open Market Committee outing marked outgoing chair Janet Yellen's last scheduled press conference as Fed chief, and some investors thought this might have opened up the floor for some legacy-oriented remarks on policy and direction.

This did not prove the case.

"Yellen's address was extraordinarily boring, and the event was a major disappointment for dollar bulls," says Saxo Bank head of FX strategy John J Hardy.

"Although we saw the dollar knee-jerk lower following the 'dovish hike' and near-entirely unchanged statement," Hardy adds, "it was just a knee-jerk and we may see USD simply limp through to year-end [in something approaching its current range]".

Source: Saxo Bank

In the commodities space, Saxo's Ole Hansen reports that gold is in focus again on the Fed hike as prices have responded to each of the last hikes with determined gains, with only a two-week delay seen in June of 2017.

"Wednesday's weak core CPI reading along with the stronger yen and lower yields are all bullish factors for gold," adds Hansen, who also notes that platinum's discount to the yellow metal has reached a record $370.

For more on the Fed, the AUD, industrial metals, and oil, watch today's Morning Call in full.

Federal Reserve
A perfunctory outing and priced-in hike spelled bad news for dollar bulls Wednesday.
Photo: Shutterstock

Michael McKenna is senior editor at Saxo Bank


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