Dollar tumbled broadly overnight, while stocks surged, after dovish FOMC statement. The greenback remains the weakest on in Asian session today, followed by Sterling and then Swiss Franc. On the other hand, strong risk appetite lifts Australian and New Zealand Dollar. Technically, AUD/UD broke 0.7235 resistance yesterday to resume rebound from 0.6722 for 0.7393 key resistance. USD/CAD also broke 1.3180 support to resume fall from 1.3664. EUR/USD resumed rise from 1.1289 towards 1.1569 resistance. USD/JPY also broke 109.14 minor support which argues that rebound from 104.69 has completed at 110.00 already.
In short, Fed dropped the tightening bias language of “”some further gradual increases” in interest rate. Instead, Fed said it would be “patient as it determines what future adjustments”. On balance sheet reduction plan, Fed is “prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments”. But no detail was revealed yet. On economic assessment Fed stay activity has been “rising at a solid rate” rather than being “strong”. Also, “market- based measures of inflation compensation have moved lower in recent months”.
More on FOMC:
- FOMC Review – Fed Calls for Patience on Further Rate Hike
- FOMC Review: All We Need Is Just A Little Patience
- Fed Balance Sheet Shrinking Inches Closer Towards Ending
- FOMC Adopts A ‘Patient’ Stance
- Fed Holds Off on Raising Rates Citing Need to Support Economic Activity as Risks No Longer Roughly Balanced
- FOMC Statement Enshrines “Patient” Approach to Future Policy Moves
- FOMC Recap: No More Hiking Bias?
- (FED) Federal Reserve Issues FOMC Statement
In Asia:
- Nikkei is up 1.24%.
- Hong Kong HSI is up 1.21%.
- China Shanghai SSE is up 0.63%.
- Singapore Strait Times is up 0.38%.
- Japan 10-year JGB yield is down -0.0022 at 0.001.
Overnight:
- DOW rose 1.77% or 434.9pts to 25014.86, reclaimed 25k handle.
- S&P 500 rose 1.55% to 2681.05.
- NASDAQ rose 2.20% to 7183.08.
- 10-year yield dropped -0.017 to 2.695, back below 2.7.
DOW’s rally from 21712.53 resumed and broke 61.8% retracement of 26951.81 to 21712.53 at 24950.40. It’s on track to 78.6% retracement at 25830.60 and above.
