The FOMC statement was not as hawkish as many anticipated. Despite that, the US dollar remained resilient afterwards, we look at what that means. Up next we hear from the RBA leader and get Japanese industrial production data. Our Premium long in EURUSD from Jul 21 at 1.0890 hit its final 1.1120 target on Sunday. Today, we opened a new USD long, supported by 2 charts and 4 reasons. The snapshot below highlights the omission of the Fed's phrase from the June meeting that it regarded energy prices to have stabilized. Since the 20% decline in energy prices took place, the Fed has not only taken notice, but any further decline in prices may creep into the Fed's inflation viewpoint.
The Fed has a dual mandate of full employment and low, stable inflation. Yellen is increasingly comfortable on the first part. The statement also noted that “some further” progress on jobs was still needed before raising rates when previously it said only “further”. The addition of “some” is a signal that the economy is closer to meeting the first part of its mandate.