The USD sold off post FOMC. Positioning into the event and expectations of more tangible additional measures eventually led to some profit-taking after risk faltered out of the gates on a combination of a post-FOMC hangover and reports of a substantial increase in virus case counts in Texas, and the market appears to be absent a clear direction. However, traders will arguably most likely be looking to re-engage US dollar short given the Fed’s low-for-longer narrative.
But it appears the markets are having trouble digesting the Texas virus outbreak headlines coming so quickly on the heels of a soft economic reopening. After all, a secondary outbreak is nothing to sneeze at as traders remain in a state of risk limbo watching risk assets for signs of continuation or stall.
Gold broke out of its recent range as the FOMC signaled its Fed funds rate target would remain on hold through 2022, and global stocks and the US dollar went lower. The FOMC reiterated that it’s ready to use its full range of tools to support the US economy.
The move shook off negative cobwebs from earlier in the week, the break of $1,729 providing some momentum to reach $1,743.
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Equities hit with the inflation stick; Saudi assurance provides oil with shelter from the storm; USDJPY hedge plays building; Gold appears prone