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Thursday 24 May 2018

The minutes of the FOMC meeting knocked down the pair USD/JPY, the yield in the US falls

The consequences of yesterday's publication of the minutes of the meeting of the Federal Committee for open market operations differed slightly from the official statement of the FOMC at a meeting in early May. Then the Fed spoke of "symmetry" to describe the goal of inflation. This was probably regarded as an unwillingness to intimidate the market, because it could calculate that the Fed will react too energetically to further inflation growth, because the inflation target of 2.0% is already looming on the horizon.
This time (in any case, judging by the reaction of profitability in the US and the increase in expectations about the Fed's rate hikes), the tone of the protocol was more "dovish", since the Fed apparently agrees to "suffer" a high inflation rate of 2% "long" time, before raising rates further.
The conclusion is that the US central bank seems to be strongly inclined to not cut the recovery period and make sure that inflation remains within the target range.
The very sharp reaction of the US yield in the form of its decline was just as muffled, but this does not apply to the pair USD/JPY, which experienced a new and strong sell-off wave at night, which caused the pair to fall to new local lows and to a level below 110.00. Judging by the dynamics, the level of 110.00 for the pair USD/JPY is too much, and the currency pair could fully rise to high levels if the yield in the USA was also high now.


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