The Fed failed to deliver any kind of significant change in rhetoric but forecasts that showed a more aggressive path of rate hikes sparked a large US dollar rally. The Australian dollar was hit hardest as it tumbled to 0.8951. Japanese trade data is due later but all the focus is on the SNB and Scottish referendum. In our Premium Insights
, the 3rd $USDCHF long hit its final target of 0.9400 from the 0.9180 entry for 220 pips. The NZDCAD Premium short from 3 weeks ago hit it's final 0.8940 target for currently 180 pips. Our existing CADJPY longs are currently netting over 90 pips. All these trades with their charts and rationale are in the Premium Insights
The main Fed focus ahead of the decision was on the inclusion of the words “significant slack” to describe the labor market and “considerable time” to describe when the first rate hike would come after QE3. Neither was altered as the doves remained in control.
However, the hawks made some progress with Fisher adding his dissent to Plosser's and 14 members now expecting a hike in 2015, up from 12. But perhaps the most notable change was in the dot chart as the median estimate for the end of next year rose to 1.375% from 1.125%.