Fed Minutes Fail to Help the Dollar – IIC Research
By: Ansar Anis Bhesania,
Ismail Iqbal Commodities (Pvt.) Ltd.
The market’s reaction to the March FOMC minutes was completely different from its reaction to the actual Federal Reserve meeting. Last month when Janet Yellen announced another round of tapering, USD soared but when the FOMC minutes were released yesterday, the dollar dropped to session lows against many major currencies.
The minutes were dovish because several Federal Reserve officials felt that the official forecasts exaggerated the pace of tightening. If you remember, the main reason why the dollar traded higher on March 19th was because Janet Yellen said rates could rise 6 months after QE ends. There was no mention of this timing in the FOMC minutes but more importantly, not all Federal Reserve officials share her optimistic views. Considering that Yellen did not volunteer her 6‐month timeline until questioned by reporters, there’s a very good chance that her views reflect only her personal timing on tightening and not a representation of how the committee feels as a whole.