The FOMC met for two days over Tuesday and Wednesday and proved to be the key trading event of the week, as traders patiently waited for the outcome. After ending it’s bond buying scheme, the Fed’s monetary-policy making body must turn its attention towards short-term interest rates. Although the Fed gave its self time to delay any tightening action by keeping the “considerable time” language in its release, its clear that the US monetary policymakers are eager to commence the process of normalization after years of near zero interest rate policy.
Its highly likely that the dollar should therefore continue to strengthen as long as US data remains positive. Later on today US GDP figures should provide a further push for the greenback.
The unexpectedly upbeat statement from the Fed has left traders looking towards the second quarter of 2015 for the rate hike.