Forex news for US trading on December 13, 2017:
Fed headlines:
- Federal Reserve hikes rates to range of 1.25%-1.50%, as expected
- The full text of the December 2017 FOMC statement
- FOMC statement redline
- What has changed in the Federal Reserve forecasts
- A comparison of the FOMC's dot plots
- Yellen opening statement: Changes in tax policy will likely provide some growth, the magnitude and timing is uncertain
- Yellen: We seem to be on a path of inflation moving up
- Federal Reserve Chair: Bitcoin is a highly speculative asset
- Yellen Q&A: We have characterized asset prices as elevated
- Yellen Q&A: Most FOMC members factored in tax bill stimulus
Other news:
- US October CPI +0.4% m/m vs +0.4% m/m expected
- Theresa May defeated in vote as UK lawmakers change blueprint
- McConnell says individual mandate repeal is included in tax bill
- Gundlach: Bond rates should continue to rise in 2018. Commodities might be best idea of 2018
- The bond king: I don't think cryptocurrencies are legit
- OPEC Sec Gen: We're working on a framework for a continuity strategy
- US EIA weekly oil inventories -5117K vs -2894K expected
- Teranet/National Bank HPI index MoM (Nov) -0.5% vs -1.0% last month
- US October CPI +0.4% m/m vs +0.4% m/m expected
Markets:
- Gold up $11 to $1256
- WTI crude down 40-cents to $56.74
- US 10-yaer yields down 5.5 bps to 2.34%
- S&P 500 down 1 point to 2663
- NZD leads, USD lags
The CPI report was the early driver and it was a good signal. Prices rose more-slowly than expected and the dollar slumped around 30 pips across the board. It stabilized from there as the market waited on Yellen.
The FOMC decision was entirely as expected but there were a few things that led to the dollar drop: 1) No particular optimism 2) Slight downgrade on jobs outlook 3) Dots stayed the same 4) Higher growth forecasts but inflation unchanged 5) Two dissents.
The move wasn't huge to start and there was some chop but it eventually got some momentum and USD/JPY slid to 112.55 from 113.10. EUR/USD rose to 1.1825 from 1.1765.
The commodity currencies also made sizeable moves, especially the New Zealand dollar. It had been only slightly higher before CPI but jumped more than a half-cent 0.7700 on those headlines and then up to 0.7022 late.
Virtually everything finished at the best levels of the day against the dollar. The pound even shrugged off a negative vote on Theresa May's Brexit plans to climb a full cent on the day, hitting 1.3415.
