Flash: FOMC minutes were USD positive - TDS

FXStreet (Guatemala) - Strategists at TD Securities noted and said, “The FOMC minutes gave short shrift to anyone expecting policy makers to flinch in the face of wobbly data or wobblier emerging markets”.

Key Quotes:

“The clear message that has been delivered from policy makers recently was reiterated yesterday; the Fed will stick with its current tapering plan unless the US economy “deviated substantially from its expected path”.”

“ Fed tapering plus soft US data may be a difficult combination for risk assets to digest; we had expected as much over the past couple of weeks but underestimated the market’s ability to ignore what the Fed was saying about the policy course”.

“With no chance of the Fed tapering the taper, we see no reason for risk assets to trade positively in response to weak data or events (on the assumption that the Fed will dial tapering back)”.

“The reverse should be the case. Firmer yields and the Fed sticking to its guns should be USD-positive”.