FXstreet.com (Barcelona) - After an inconclusive London session yesterday, the USD fell sharply in the NY afternoon as the FOMC minutes for their 1 August meeting signaled a clear intention to ease monetary policy. Whereas a "few" members argued for accommodation at the prior meeting, the minutes showed, many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery".
According to Sean Callow, an FX Strategist at Westpac, “The committee weighed the risks to the economy that were tilted to the downside and reflecting strains from the Eurozone crisis – the potential for a sharper than expected global slowing and US fiscal restraint”. The minutes showed an active discussion of policy options including the merits of purchasing more Treasuries vs. mortgage backed securities, extending the Fed's guidance to maintain accommodation beyond the current target of "late-2014", cutting the interest paid on reserves deposited at the Fed and a program similar to the BoE's "funding for lending" scheme.
According to Sean Callow, an FX Strategist at Westpac, “The committee weighed the risks to the economy that were tilted to the downside and reflecting strains from the Eurozone crisis – the potential for a sharper than expected global slowing and US fiscal restraint”. The minutes showed an active discussion of policy options including the merits of purchasing more Treasuries vs. mortgage backed securities, extending the Fed's guidance to maintain accommodation beyond the current target of "late-2014", cutting the interest paid on reserves deposited at the Fed and a program similar to the BoE's "funding for lending" scheme.
