Bernanke Stays Dovish, Kiwi GDP Soars

The Fed maintained its plan to buy $85 billion in assets each month but noted an improvement in the economy. The euro was the top performer as worries about Cyprus ease while the yen lagged. Early in Asia-Pacific trading the New Zealand dollar jumped after GDP rose an astonishing 1.5% in the fourth quarter. 2 more trades on GBPUSD were issued, as well 2 on EURUSD, 2 on USDJPY, 1 on Gold and 1 on EURGBP. 2 charts were issued on USDJPY and 2 on gold, illustrating 3 types of Death Crosses.

The main points of the FOMC statement were left unchanged although Bernanke said there has been an obvious improvement in the economy. The Fed chairman said accommodation will remain in place until the pick-up proves sustainable. The 2013 GDP forecast from the Fed was skewed slightly lower this year to 2.3% to 2.8% from the previous range of 2.3% to 3.0%. Overall, however the Fed cited a return to moderate economic growth.The knee jerk reaction to the statement was to sell the US dollar but the move was small and short-lived.

A much larger move came in the New Zealand dollar follow fourth quarter GDP. In the final three months of the year, the economy grew 1.5% compared to 0.9% expected. It was the fastest pace of growth since late 2009.NZD/USD immediately jumped a half-cent to 0.8270 following the release.

The focus now shifts to February Japanese trade balance numbers. Exports are expected to fall 1.7% y/y while imports are forecast to rise 15%. The releases is at 2350 GMT.

At 0430 GMT, Japan's January all-industry activity index is expected to fall 1.4% following a 1.8% rise in the final month of 2012.