The Aussie Dollar Exploded Higher After The Release Of FOMC Minutes

Getty / ESA

The release of the FOMC minutes to the most recent meeting have ignited a rally in forex and stock markets the like of which we haven’t seen for some time.

The Aussie dollar has roared to 0.8835 this morning, almost a cent higher than where it was prior to the release of the FOMC minutes.

Key to the price action is that the minutes suggest members of the FOMC are worried about the outlook for global growth and the recent surge in the US dollar’s strength.

The staff’s medium-term forecast for real GDP was also revised down a little, reflecting a higher projected path for the foreign exchange value of the dollar along with slightly smaller projected gains for home prices.

Some members also noted that while they wanted to change the language around the length of stable rates, they were worried about an implied tightening in doing so.

It all adds up to a fairly dovish read from a central bank which is about to end QE this month.

As the chart shows, the result is a rally in stocks and gold, and a fall in the US dollar.

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