I don’t take too much of what goes on during FOMC week seriously with respect to making actionable moves.
While in market management I try very hard to keep whatever paranoia lurks in my brain locked in a closet in one of the rear lobes I have noted that usually, no matter what non event FOMC may have been [this just in, 30% of Grandmas have passed away during ZIRP’s post-2008 run, with their savings passbooks never having received so much as a .25% bump while the pigs get richer and fatter with every non-action] as these oh so venerable economists ride off into the sunset, the backdrop for several days after tends to be one that seems highly respectful of their policy.
Enter the US dollar, which is bouncing again today after its supposed stewards, who say they are going to begin a real interest rate hiking regime you know, at some point, have gone off to their mid-summer vacation destinations after a job once again not done. Of course, with gold and commodities in the toilet (along with what is commonly viewed as inflation) they can soak up the breathing room for as along as they want. Screw Grandma, she is not material to the discussion; asset owners are.
Boy, I am getting awfully talky for a post that is just supposed to update USD. So here is Unc, having made a higher high to May and finding support above the MA 50. There is better support down below 96 and really, it can drop to 94 and still keep open a possibility that a new uptrend has begun.
But for now, USD bounces because the Fed really means it when they talk about removing asymmetrical, unprecedented monetary policy. A rise above 98 and the July high seals it. In that event USD could be looking at accelerating economic growth (tell that to certain fading data and indicators) or the opposite, economic contraction. Either of those can be acceleratants for the currency, but for very different reasons.
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