Forex headlines for Sept 18, 2013:
- No taper from the Fed
- Fed wants more evidence before cutting QE pace
- Fed cites tightening of financial conditions
- Bernanke emphasizes Fed data dependent, rough course is still same
- Berlusconi allies lose vote to block Senate ouster bid
- Berlusconi says he will remain in politics even if excluded from Senate
- Full Fed economic projections
- August US Housing starts 891k vs 917k exp
- Business Roundtable CEO Economic Outlook Index falls to 79.1 in Q3 from 84.3 in Q2
- Major optimism from BOC’s Poloz in speech
- Republicans looking to stoke Obama with with defunding plans
- S&P 500 up 1.2% to 1725 – fresh all time high
- Gold jumps $53 to $1364
- WTI crude up $2.65 to $108.07
- AUD leads, USD smoked
The Fed didn’t taper and the US dollar got absolutely creamed. Bernanke didn’t help as he stayed mostly dovish in his press conference. He said the path of ending purchases is roughly the same which means wrapping it up by mid-2014 but it depends on the data.
In the past the ‘data-dependent’ clause didn’t carry that much weight. Most people thought it meant the economy continuing but now it’s clear that the Fed wants to see an accelerating trajectory. Given that, the market isn’t thinking we’ll see a near-term taper or a wind-down by mid-2014.
Levels were blown out everywhere with the euro and pound hitting longer-term highs. AUD and NZD absolutely stormed higher.
Thanks for coming along for the ride with me, I’m wiped!