USD: life after the Fed's meeting
Fed’s Dec. 17 meeting revived demand for the US currency. As many economists expected, monetary policy remained unchanged. What’s important, the Fed removed a commitment to keep rates low for a considerable time, but replaced it with a promise to stay “patient” in tightening and underlined the data-dependence of the rate hike terms. That means that the Fed turned more hawkish, but tries to soften the market impact as much as possible.
The Fed’s new rhetoric draws renewed market attention to the US economic data. Watch the Final Q3 GDP on Dec. 23 – the figure is expected to be revised up to 4.3%, rendering additional support to the US dollar. As for the early January, the market will be impacted by the FOMC meeting minutes on Jan. 7 and by the labor market data on Jan. 9. The market cares whether the US NFP figures stayed strong in December or not.