The Federal Reserve raised its policy rate by 25bp yesterday, in line with expectations. The target range is now 1.25 to 1.50 percent. The committee rasied GDP estimate to 2.5% (from a previous 2.1%) and 2018 inflation forecast to 1.7% (from1.6%) and noted that the labour market will remain strong.
In what seems to be a “buy the rumour sell the fact” the US dollar closed the day in losses yesterday with the US Dollar index, an index that measures the strength of the US Dollar against a basket of currencies, dropped to lows of 93.40 yesterday and is currently testing these levels lower again, at the time of writing.
USDJPY dropped to 112.46 yesterday and EURUSD was up to 1.1831 as the USD sold off. This morning so far the USD is seeing some consolidation, or at least the losses for the buck have somewhat shallowed.
Today we have more policy anouncements from the BoE and the ECB that are widely expected to stay on hold. Other than the central bank anouncements we also have US Retail Sales for November.
