DXY extends the downside post FOMC minutes

DXY has continued its decline after a non favourable set of FOMC minutes where the focus from markets was on inflation.

The Fed is clearly concerned about the low inflation which it now describes as 'below 2%' (previously 'somewhat below 2%') and in that respect, many saw sub 2% inflation for longer than expected while the Fed is split on assessment if inflation expectations well anchored. 

FOMC Minutes: Policymakers agreed a fall in longer-term inflation expectations would be undesirable

FOMC meeting minutes

• Official saw inflation pick up over next couple of years.
• Several said inflation risk could be to the downside
• Many saw sub 2% inflation for longer than expected.
• Many expected B/S to only modestly tighten policy
• Fiscal policy uncertainly damping investment
• Rising stock prices has eased financial conditions
• A fall in longer term inflation expectations would be undesirable.  
• Many Fed officials swa weak inflation due to idiosyncratic factors
• Some officials concerned by weak inflation, argue for patience
• Fed split on assessment if inflation expectations well anchored

DXY and US 10-years yield levels

Having opened at 93.814, the day's range has been between 93.485 - 94.145 vrs the previous close of 93.853 and within the 52WK range of between 92.548 - 103.820 with a YTD return -8.52%. The US ten years also dropped and currently trade at 2.2290% within a range of 2.2185% - 2.2834% vrs a previous close of 2.2728% and within a 52WK range of 1.5135 - 2.6394 and a YTD return of -8.88%.