Forex news, data and trading headlines 16 December 2015

Mark this day as one for the history books as the Fed raises rates for the first time in nearly 10 years

The FOMC

  • Federal Reserve hikes interest rates by 25 basis points
  • FOMC dot plot and central tendencies
  • Full statement from the December 2015 FOMC meeting
  • Fed plays it clever in not releasing a full statement
  • Here's the real statement from the FOMC
  • What changed between Oct and Dec in the FOMC statement?
  • The #1 reason the Fed hike was a touch on the hawkish side
  • Yellen: Fed action marks an end of an extraordinary period
  • Yellen Q&A: We want to move in a prudent, gradual manner
  • More from Yellen: Zero rates mean less scope to respond to negative shock

  • Yellen Q&A: I feel confident about US economic fundamentals

  • Yellen: What goes up is going down and visa versa

  • As the Fed enters a new chapter of monetary policy what does it all mean?

The rest of the day's news

  • European mostly mildly higher at the close
  • Forex technical analysis: USDCAD surges to new 11 year highs on Crude inventories
  • US DOE weekly crude inventories +4801k vs -1500k exp
  • France's Macon isn't trading the Fed today
  • December 2015 US Markit manufacturing PMI flash 51.3 vs 52.6 exp
  • Fitch cuts Brazil to junk - Outlook remains negative
  • US stocks off to the races ahead of the FOMC
  • November 2015 US industrial production -0.6% vs -0.1% exp m/m
  • Who can you trust to steer you through 2016?
  • November 2015 US housing starts 1.173m vs 1.135m exp
  • The strongest and weakest as the Fed Day begins
  • Merkel says Germany will do what it can to avoid Brexit
  • US MBA mortgage applications -1.1% vs +1.2% prior

Well here we are after many years, many ups and downs, mucho dollars printed, the first rate hike from one of the biggest central banks in the world. I feel all emotional that I'm reviewing this day. I'd better make it good eh?

The lead up was anything but exciting. The biggest spark came in USDCAD after the oil inventory data. A build after drawdown was expected, and far bigger than the API jump (which would have warned markets today) saw USDCAD burst up to an 11 year high at 1.3848. With traders not willing to get caught out on a limb ahead of the FOMC, we were soon coming back down to around the 1.3770 area to tread water like everyone else. The Fed took over and we went 1.3840 to 1.3740 in the whipsaw. We end pretty much bang in the middle

The usual sideways rangy action we get on FOMC days was evident in most pairs. The euro and pound were sitting tight in roughly 40-50 pips ranges above their respective big figures at 1.0900 and 1.5000. Things came to life on the announcement. First they dropped on the hike, then they rallied on the details 1.0888 - 1.1011 was the range in EURUSD and 1.4961 to 1.5099 was the box for cable. By and large we're back where we started but with an edge of softness as the market digests the news

USDJPY still only managed a 105 pip range for the day 121.38 on the bottom and 122.43 on the top, and that was all on the Fed

Today may be historic for the Fed and monetary policy, but it wasn't one to remember in FX markets. Risk had already been reduced and no one looks to be steaming into any new positions. That could signal two things, 1. The market was so baked in that there's nothing new to jump on, or 2. Half of them don't know what it all really means and it will take some time to reach a consensus and thus a direction

From where I'm sitting, the FOMC delivered a rate hike with an equal, if not small, sprinkling of dove and hawk dust. That they've entered a hiking cycle which may bring out the USD buyers over the next few sessions, but unless we break some big topside levels we'll remain in range

I hope you've come away from today with many pips, and more importantly few or no losses. Tomorrow we wake up to a whole new world and Europe will make its decision on today's events

From rocking the world to storm in a tea cup as Yellen starts lift off