In the minutes of January 28-29 FOMC meeting, it’s noted that policymakers generally judged that current monetary stance was “appropriate”. Maintaining current stance, with federal funds rate at 1.50-1.75%, will give the committee ” time for a fuller assessment of the ongoing effects on economic activity of last year’s shift to a more accommodative policy stance”. Fed expected growth to “continue at a moderate pace”.
Trade uncertainties “had diminished recently” and there “signs of stabilization in global growth”. But uncertainties remained, including risks from the outbreak of the coronavirus that started in China. “The threat of the coronavirus, in addition to its human toll, had emerged as a new risk to the global growth outlook, which participants agreed warranted close watching.”
Dollar index rose notably yesterday to close at 99.70, staying firm after FOMC minutes. Rally in USD/JPY was the main force lifting the DXY yesterday, while EUR/USD stayed weak after recent selloff. With 99.66 resistance broken, whole up trend from 2018 low of 88.26 is resuming. The strong support from 55 week EMA affirmed medium term bullishness too, even though upside momentum is a bit unconvincing in weekly MACD. DXY should now rise through 100 handle to 78.6% retracement of 103.82 to 88.26 at 100.49.
