Yen recovers some ground today as Asians stocks dip after late selloff in US equities. Dollar follows by paring some of this week's losses as crude oil is back below 80 level while gold trades below 1090. Risk aversion would probably give the Japanese yen some further support as Japanese Nikkei closed below head and shoulder neckline support which should confirm medium term reversal. However, dollar's fate will continue to be tied between risk aversion and strength in gold.
FOMC statement overnight was largely inline with markets' expectations. Fed decided to leave the Fed funds rate unchanged at 0-0.25% and reiterated to keep it low for 'an extended period'. The Fed also listed conditions that warranted an unprecedentedly low level of interest rates: low rates of resource utilization, subdued inflation trends, and stable inflation expectations. In the meeting, policymakers also modestly upgraded its assessment of current conditions and reduced the amount of agency debt it purchased. These mildly positive factors partly offset the dovish tone of the post-meeting statement. More in FOMC Review: The Fed Disclosed Parameters For Making Rate Decisions
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