Fed still biding its time - Westpac

Sean Callow, Research Analyst at Westpac, suggests that the US dollar is likely to struggle to rally near term.

Key Quotes

“The FOMC’s steady hand on rates was no surprise but we read the changes to the statement as overall somewhat dovish. While global developments are no longer described as posing “risks”, they will still be monitored “closely”.

Moreover, inflation is no longer described as having “picked up”, instead is just running below target, while the US economy “appears to have slowed.” This does not sound like a committee thinking very seriously about another rate hike. A soft tone to USD in the weeks ahead should help limit the downside on AUD/USD.”