The Fed touched on softer short-term inflation but better growth in a statement that had something for everything but nothing definitive or surprising. On the day, the Australian dollar was the top performer while the loonie lagged to a fresh 5-year low. The RBNZ followed up the Fed decision by shifting to neutral and flexing its jawbone. Our Premium subscribers who got on those 2 Premium shorts in AUDJPY, issued on Monday are realizing 200 pips on the 1st trade and 130 pips on the 2nd trade, which was filled after last night's release of higher than expected Aussie CPI temporary lifted the pair.
The Fed upgraded its economic assessment to 'solid' from 'moderate' but lowered its view on inflation, saying it has declined and may decline further. The key caveat was that officials remain confident in medium-term inflation which is a signal they believe low inflation is a one-off effect due to oil and that stronger inflation pressures are in the pipeline because of jobs growth.