No rate changes out of yesterday’s FOMC rate decision communication. The Fed is still aiming for 2 more hikes for 2017. The Fed statement also noted slower economic growth in the first quarter this year, but dimissed that as transitory. The US central bank when on to say that labour market and inflation continued to be robust.
Finally the USD reacted positively to the announcement, and was seen steadying against the JPY and the euro. USDJPY is near 2 week highs after hitting 112.88 throughout yesterday’s session, the currency pair is currently at 112.75. Even EURUSD dropped to lows of 1.0882 yesterday but is now currently at 1.0895 ahead of European open.
The other unanswered question from the Fed is when the balance sheet normalisation process will start – so far we have been given no mention with regards to that.
We now look on to Friday’s Non farm payrolls for a continued confirmation that the US economy’s recovery remains on track. Until then throughout today we have EZ service PMIs, US Factory Order and Durable Goods. Later this afternoon ECB president Mario Draghi is expected to deliver a speech in Switzerland.
