ABN AMRO talks about near-term USD weakness
Markets were positioned for a more hawkish Fed in both of its tone and its dot plot but the Fed did not meet these expectations as instead signalled a gradual approach for rate tightening with only two more rate hikes this year, notes ANB AMRO Research.
On the FX front, ABN AMRO projects that the broad USD weakness post-FOMC is likely to persist over the coming days.
"It is likely that the US dollar rally has come to an end and that more downward pressure is building in the near-term," ABN AMRO adds.
ANB AMRO also thinks that weakness in the gold price is over for now and a move back towards USD 1,250 is on the cards in the coming weeks.
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Looking at gold, it failed today in the 50-61.8% retracement range but it won't take much to get it back to $1250.
