USD Trading Outlook (18-06-2015)

The much anticipated FOMC meeting and Yellen’s press conference were disappointing for USD bulls. Yellen commented that the pace of jobs gain has improved but tightening would be gradual in line with upcoming data. The median projection is for two rate hikes this year.

The projections for Fed Funds Rate and GDP were downgraded from the March FOMC figures, specifically 2016 FFR to 1.625% from 1.875%, and 2015 GDP to 1.8-2.0% from 2.3-2.7%. This gave reason for the market to sell US dollar while US equities firmed.

The USD will continue to be data dependent. US inflation data and Philly Fed Manufacturing Index are to be closely watched today.

GBP has outperformed other currencies, while NZD has been offered heavily past month. GBPNZD is up 19% since late April, the largest movement in FX during this period.

Precious metals maintain their recent tight ranges, with Gold at 1186, Silver at 16.10.

Trading Quote of the Day: “The important point is no decision has been made by the committee about what the right timing is of an increase. It will depend on unfolding data in the months ahead. But certainly an increase this year is possible; we could certainly see data that would justify that” – Janet Yellen, US Fed Chair