FXStreet (San Francisco) - Not a big surprise but it was significantly that the FOMC announced they have plans to end its taper following the next October's meeting with a $15B last reduction. However, the real message was that the Fed is reinforcing the status quo as interest rates seem to be here for long term.
"The Fed did confirm that it will end QE in October, barring a change in outlook," commented Jamie Coleman from FXBeat. "Most expected the Fed to hike rates in the middle of 2015 ahead of the Minutes and most expect the same thing now."
So, the USD continued with its downtrend against its major competitors as interest rates will be low until, at least, mid-2015. The Euro performed its best single day since in since June 30 while the GBP/USD recovered highs above 1.7150 and the USD/JPY lost all previous gains and it closed barely positive.
Currently, EUR/USD is trading at 1.3641, up 0.21% on the day, having posted a daily high at 1.3649 and low at 1.3602. EUR/USD spot is in neutral territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is slightly bullish.
However, as Gerry Davies from FXBeat reported recently, there are a huge option expiry that is "likely to dampen enthusiasm" in the Asian time zone. "Strikes are at 1.3600/05 (1.5 B) 1.3615 (540 M), 1.3620/30 (500 M) and 1.3650 (710 M)."
Currently, GBP/USD is trading at 1.7157, up flat on the day, having posted a daily high at 1.7159 and low at 1.7156. The hourly FXStreet OB/OS Index is showing neutral conditions, alongside the FXStreet Trend Index which is slightly bullish.
Main headlines in the American session
Canada: Housing Starts rise more than expected in June
FOMC announces the end of QE in October.. if economy matches expectations
There are three minorly hawkish developments in the FOMC minutes
Wall Street advances after 2-day drop; USD weaker despite QE's end announcement