The FED held rates at 0.5% in a widely anticipated result at the FOMC meeting overnight. Janet Yellen did make it clear that further rate hikes this year were expected by the majority of members however. Also 3 members dissented and wanted to raise in September.
The result was USD weakness across the board and AUD/USD has tested 0.7650 so far as the rally continued in the Asian session Thursday. Although the FED may raise in December the market is focused on the short term at the moment and risk appetite surged with stocks rebounding sharply to 18300 on the US Dow.
The other huge event in the market yesterday was the BOJ announcement of a new monetary policy regime targetting the yield curve and specifically a 10yr interest rate along with the normal cash rate.
The USD/JPY surged higher initially to Y102.80 before reversing later in the US and European sessions to 100.40 as the market lost confidence quickly that the BOJ know what they are doing. A break of Y100 would open up a steeper fall in the strongest currency already this year.
