It is silly season, for sure. The Fed did almost exactly what was expected, saying it would end its Treasury program but one month later than planned, a nice little fudge buying them some time and giving the dealers an extra month to week themselves off the program. Good move.
The market rightly seems to think that rates will edge up on the move but the brighter outlook from Bernanke and Co. is helping ramp up risk traders in the near-term. The bought dollars on the higher rate play and then were squeezed as risk assets (mainly equities) shot higher after a correction. The S&P is at new highs for the year after fretting all week about a correction after the big rally of recent weeks.
Once again,you could have leaked me the statement and I still could not have made money off it, as the market changes gears faster than a Ferrari.
EUR/USD is back above 1.42, GBP/USD above 1.65 and AUD/USD is consolidating gains at 0.8350.
