Forex news for North American trading on December 19, 2018:
Fed headlines:
- Federal Reserves hikes rates to 2.25%-2.50%, as expected
- Fed boosts 2018 and 2019 GDP forecasts, leaves inflation mostly unchanged
- Strikethrough comparison of the new and old FOMC statements
- The FOMC dot plot from December 2018
- Fed's Powell Q&A: Inflation trend lets the FOMC be patient going forward
- Powell: Since September, some cross currents have emerged
Other headlines:
- Canada November CPI +1.7% vs +1.8% y/y expected
- US current account for 3Q -$124.8B vs. -$125.0B estimate
- French EU affairs minister : Could give UK more political assurances
- Italy's Salvini threatens to veto EU budget
- US weekly EIA oil inventories -497K vs -2500K expected
- US November existing home sales 5.32m vs 5.20m expected
- Juncker: Disorderly Brexit would be an 'absolute catastrophe'
- Belgian December business confidence -0.9 vs +0.4 prior
Markets:
- Gold down $7 to $1242
- WTI crude up 96-cents to $47.20
- S&P 500 down 39 points to 2506
- US 10-year yields down 5 bps to 2.76%
- Euro leads, Australian dollar lags
Early in the day the market was leaning towards the chance of dovish surprise from the Fed but the result was the opposite. In the aftermath, risk trades were beaten up and the long-end rallied.
The US dollar jumped on the headlines and continued higher afterwards, particularly against the commodity currencies. USD/CAD broke 1.3500 in a 30 pip climb that would have been more if not for a 2% rebound in oil.
AUD/USD was beaten up ahead of today's Aussie jobs report. It sank down to 0.7100 from 0.7175 while the kiwi fell 60 pips.
EUR/USD dropped to 1.1370 from 1.1430 but looks to be trying to stake out a bottom. Similarly, cable is sitting at the European low, near 1.2610.
