What Did the Fed Do That Crushed the Euro Today?

I couldn't find anything from today's FOMC that was so unexpected and triggered the sell-off of the euro against the dollar.



We all know that there is one more hike this year, and the Fed is going to sell its bond holdings.  There is not a thing in the announcement that we have not expected.  Somehow, the Forex markets reacted very differently.  All major currencies were sold off against the U.S. dollar.

I waned to know why.

I managed to find this excerpt from fxstreet.

The markets jumped to attention when twelve Fed officials (up from eight in June) still want to hike at least once more in 2017. This overwhelming sign of confidence in the US economy caught traders by surprise and has transiently quashed the market view to sell dollar on rallies.

Is that it?  All 12 Fed officials agreed to raise the interest rate one more time by the end of 2017.  That took the traders in the Forex markets by surprise, really?  There were only 8 of them back then, but now there were 12, all of them, and that was the surprise, really?

Now, I am really surprised.





1 comment:

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