21 September 2016 at 22:18 GMT
- Japan: Foreign Investment 1950 GMT
US data released
- EIA Crude Oil Stocks Change-September 16 (Actual-6.2 million barrels vs forecast 3.35 m/b)
FX traders managed to squeeze some excitement out of a morning session where many were not particularly interested in doing anything until after the Federal Open Market Committee statement was released. That was thanks to another much-better-than-expected EIA crude stocks report. The surprising 6.20 million-barrel decline in US inventories validated Tuesday’s API data and oil prices extended the overnight rally. WTI rose from a low of $44.66 to $45.61 where it ended the day.
The commodity currency bloc rallied.
The US dollar
was kicked in the teeth by the FOMC statement and its projections: 88% of the market patted themselves on the back for guessing correctly that the Fed would leave rates unchanged. The other 12% have their eye on a December move.
A minuscule upgrade in the tone of the statement, which left the door wide open for a December hike, was offset by a downgrade to GDP growth rates in 2016, 2017 and 2018. Fed chair Janet Yellen even kept a straight face when she denied that the US election had any bearing on today’s decision.
The US dollar headed into Asia down across the board led by a big gain in the Japanese yen. The FOMC decision exacerbated the dismal reception that USDJPY traders gave to the Bank of Japan's policy changes.
US equity indices rallied following the FOMC with the Nasdaq posting an intraday record.
The USD headed down across the board in Asia led by a big gain
in the Japanese yen. Photo: iStock
– Edited by Gayle Bryant
Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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