Dollar Lower after FOMC Minutes

Action Insight | Written by ActionForex.com | Oct 09 07 19:18 GMT |

Dollar feels some pressure against most majors since mid US session and extends weakness right after the release of FOMC minutes. The minutes revealed that the policy members made a unanimous decision on Sep 18 to cut federal funds rate by 50bps to 4.75%. There are not specific plan for further rate cuts and "further actions would depend on how economic prospects were affected by evolving market developments and by other factors". The minutes noted that "outlook for economic activity as characterized by particularly high uncertainty, with the risk to growth skewed to the downside." Members are concerned with the impact of the financial market turmoil on aggregate demand and a more general tightening in credit. They believed loosening monetary policy was an appropriate response to the tightening in credit. The minutes noted that housing markets remained "exceptionally" weak. "Moderate" growth is seen in the beginning of Q3 even though business investment remained strong. While inflation slowed, "inflation risks could be heightened if the dollar were to continue to depreciate significantly." Also, "labor markets across the country generally remained fairly tight". ...........Read more ActionForex.com