TYhe FOMC meeting last night was a great success for the US Dollar exchange rate and horrible for everything else!
The US dollar rate rallied the most in six months after Yellen suggested that the US will taper the asset buying program and that interest rates will have to rise in the coming months.
“sufficient underlying strength” for the economy maintains expectations of a QE3 close by September or December.
This was enough for stock markets around the world to sell off as did the “risk” currencies such as the Australian Dollars, New Zealand Dollars and emerging markets such as the South African Rand and Turkish Lira.
Forex Traders are now pricing in the first rate hike to be June 2015, but Yellen’s tone suggested that it may be much earlier.