by Chris Becker
The Federal Reserve kept its historically low interest rates on hold overnight in one of the most anticipated FOMC meetings in recent years. The takeaway is pretty simple, while the Fed is relatively happy with the domestic economy, although the inflation outlook has moderated and the labour market remains the key focus, it’s really about external ructions that is keeping a hold on the lever.
Name your poision: weaker Chinese growth and their stock market crash, huge volatility in oil and commodity markets, emerging market currency crises. The outcome is a lower USD, and possibly for awhile, as the Fed doubles down on its dovishness. The US dollar index (DXY) fell 1% to a four week low, dragging up all the “undollar” bets like gold, Australian dollar and Euro.