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Waiting for an FOMC Surprise
With the FOMC set to have its first policy announcement for the year currency markets for the day have remained mostly quiet about the only big move, an earlier spike in Aussy following a strong read in the quarterly Trimmed Mean CPI that read 0.7% against a consensus figure of 0.5%. Even here though we have seen AUDUSD eventually easing off in European trade with eyes focused on what the banks decision will be.
Note many at this point are asking whether the Fed is on track of a widely expected symbolic tightening of the Fed Funds rate following the mixed signals that economic data has been painting. While sentiment in the US has remained robust people do not appear to be dipping into their wallets as we saw Retail Sales contract, supply side data ease off, and inflation metrics falling short of forecast. Capping all these bad news was yesterdays Durable Goods numbers that says strategic buys, i.e. big ticket items, have been weak to reflect uncertainty of future conditions.
So the big question for many now is will the Fed remain very optimistic of future conditions or sound a cautious tone. The latter will set in fully with many of the charts that has a pullback from recent dollar highs on their agenda.
Source: http://www.fxinstructor.com/blog/waiting-for-an-fomc-surprise
