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Analysts at Westpac explained that the Fed held steady but sounded optimistic once again, setting up a December rate rise.  

Key Quotes:

“This was fully expected yet the US dollar rose across the board and equities faltered. Oil prices fell again to near 3 month lows.”

“Today’s calendar includes the RBA’s Statement on Monetary Policy, Australia Sep housing finance, China Oct CPI and UK Q3 GDP.”

“The Fed voted unanimously to leave interest rates steady, their statement including just a couple minor edits and overall continuing to acknowledge the robust economy and more gradual rate increases. Business investment was characterised as having, “moderated from its rapid pace earlier this year”, a downgrade from “grown strongly”, otherwise the Fed continues to note brisk conditions, repeatedly using “strong” to characterise  the labour market, household spending and broader activity. The Fed provided no explicit signal for a December hike but that’s not necessary with markets almost fully pricing one in.
EUR/USD fell from 1.1445 to 1.1365, having been 1.1400 pre-FOMC. Earlier, European Commission (EC) economic forecasts garnered more interest than normal (markets normally focus on ECB’s projections which are due in December) because of the scrutiny of Italy’s budget proposals. EC edged lower their growth for 2019 to 1.9% (still above ECB’s 1.8%) but the most important were the projections of Italy.  The EC forecast lower growth than the Italian government in coming years and so they project budget deficit to GDP of -2.9% in 2019 and -3.1% in 2020.

USD/JPY rose from 113.60 to 114.00 – a one-month high. AUD/USD preserved recent gains into the Fed decision, sitting around 0.7285, but then was dragged down by the broad USD bounce, slipping under 0.7260. NZD/USD mostly remained elevated, ranging between 0.6770 and 0.6795, but slipping to 0.6750 post-FOMC. AUD/NZD firmed, from 1.0720 to 1.0750.”