As more dust settles what happens now to the dollar?
So far things have gone according to plan
The first thing I was watching for this was a run in USDJPY into the Fed. Tick
The next was the reaction over the FOMC. We got both pop and drop but the message from the Fed has kept the rally afloat - Tick
Adam highlighted 5 key events to watch today and tomorrow to see if raising rates actually turned into rising rates
The Libor fix was the first indicator, and the USD overnight rate jumped 21bp to 0.36%, the highest since March 2009 - Tick
In around 30 minutes the Repo rates will start updating. At 14.30 GMT trading opens on commercial paper
Signs that the hike will filter through into rising rates will keep the dollar on the front foot as confidence in the move takes hold
The biggest signal I'm getting is that we're not smashing any of the upper range levels in USDJPY, and look in no rush to do so either. The time of year is a big factor. The Fed was a huge event but well telegraphed by the Fed, and they've managed to suck most of the volatility out of it. One eye will be on the holidays now and that could mean things get choppy as a lot of traders will be finishing this Friday
With Adam's key factors in play the market will want to see the transition, but will also be thinking about closing up. I don't see the buck making any really significant moves but we might see some bigger levels tested. Keep an eye on the London fixes from now on for the possibility of some volatility
The euro looks like it's found a base today and given it's recent moves, I find it hard to see much further downside
GBPUSD looks a bit more vulnerable, looking at the PA. 1.4900 -1.4880 will be a good test of sellers appetites
