Fed specific about timing, good news for the USD
Comments of the US Federal Reserve after its September meeting were quite soft. The range for the regulator’s key rate was left unchanged, from 1.0% to 1.25%, as widely expected, and the forecasts of the Fed members hint at another possible rate increase until the end of 2017 and three more in 2018. By the way, before the meeting the CME futures indicated 50% expectations of the rate increase in December 2017 and after the meeting this number reached 58%.
The USD was pretty positive in its response to the news that the Federal Reserve would begin selling some of the assets, which had accumulated on its balance sheet over the QE program period. At the moment, it’s about $4.7T and the procedure of selling is going to start in two weeks. For once, the Fed was very specific about the time and that’s good for the Dollar.
On Thursday morning, the EUR/USD pair got stabilized close to 1.1890 after a rather significant decline the previous evening. Today the market will keep analyzing the Fed’s comments and decisions, that’s why the USD may continue strengthening its positions, although it is not expected to rally like yesterday.
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