The USD Fades After The FOMC

The USD fell through the 97.00 support level, despite some interesting comments in the FOMC Minutes that caught a few people off guard.

For the most part, all the expectations have been for a newly dovish Fed to look to start cutting rates. That is particularly true of Donald Trump as he would like to see at least 50 basis point shaved off the current rate.

However, digging in to the Fed Minutes that might not be the case. The suggestion there was that they were ‘looking to raise the range later this year’. That was a bit of shock given the commentary around rate cuts that we’ve been hearing.

Nevertheless, the USD closed lower and as mentioned has now slipped through the 97.00 mark, which offered some support to the majors.

The other big talking point was CPI. It came out mixed with the core figure lower and the headline a bit better.

The numbers are basically all hovering around the 2% mark, which is basically at the very bottom of the Feds target range of 2-3%. More concerning is that they are not seeing an uptick in inflation, based on the fact that jobs are strong and continuing to be strong, with wage growth also picking up.

Stocks ticked higher on the session as well and the SPX closed up 0.34% or thereabouts.

Asian Session Wrap

The main data out of the Asian session today will be from China with both CPI and PPI to be released.

It looks like both figures are expected to be significantly higher than the prior, but as we’ve seen recently, Chinese data has been quite weak.

The AUD/USD is in focus to some degree on the back of that data, as well as the fact that the Aussie PM has announced the election for May 18. But more on that soon.