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Risk Assets

USD Down Following Flat FOMC

The US dollar has recovered so far across the European morning on Thursday following a sharp sell-off last night in reaction to the December FOMC meeting. The Fed kept rates unchanged, as expected. But, it seems traders were disappointed by the lack of hawkish signals.

Although the statement itself was a little more positive than last time, there was not much in the way of new information. The Fed said that current policy levels remain appropriate. However, it will be monitoring incoming data. USD index trades 97.17 last, up off the post-FOMC 97.01 lows.

ECB On Watch

EURUSD is retreating so far on Thursday as the recovery in USD weighs on price. Looking ahead today, the main focus is the ECB meeting which will be the first headed by new ECB chief Lagarde.

We expect no policy changes. However, traders will be keen to hear Lagarde’s outlook to judge whether we are likely to see ECB easing in Q1 2020.

So far, Lagarde has said that the ECB will remain committed...

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