Yesterday’s FOMC decision saw the Fed take a dovish tilt towards markets, and while no decisions were made at yesterday’s meeting on rates, the reduction in expected hikes for the rest of the year through the dot plot matrix was enough to promulgate risk trends. As we had written yesterday, it would likely be the dot plot matrix that would set the tone with risk trends moving forward, and given the recent movement in the US Dollar it would appear that to be the case.
The predominant theme post-FOMC has been USD-weakness against pretty much everything, commodities included. On the chart below we’re looking at the FXCM Dollar Index, and as you can see we broke below the support level mentioned yesterday to fall one level further on the denoted Fibonacci retracement.
