Thursday 19 December. A busy 24 hours.

There has been a lot of information to take in this last 24 hours. And in the main it's left us with positive conclusions.

Starting with FOMC, as expected a 'hawkish cut' was delivered. Due to the continued strong data coming out if the US, it has been increasingly clear the previous projections for 2025 rate cuts were a little ambitious. And the revising of the 'dot plot' provided the hawkish sentiment to propell the USD. And all things considered, dollar strength 'should' continue over the coming days / weeks. Regarding the press conference, it now appears the focus is back on inflation rather than jobs. I did afford myself a wry smile as the VIX bolted up to 27 in the aftermath of the decision. A hawkish narrative was well telegraphed, so I'm not sure why there was so much 'panic'. perhaps it was Mr Powell's misconstrued comment on inflation predictions 'falling apart'.

Next up, the BOJ (not surprisingly) surprised with a 'dovish hold'. For a while it has been apparent the BOJ don't really want to hike rates further. But also doesn't want the JPY 'too weak'. The good news is, the yen weakened and is (I believe) currently shortable.

The bad news is, the will they / won't they, don't want to but might have to circus will continue for while yet. And the risk to any short yen trades will be verbal or actual 'intervention'.

Finally, the BOE held rates. A 'mildy dovish' hold, (3 members voted to cut), was a slight surprise and the GBP weakened. But in the grand scheme, The UK will still be 'slower' cutting rates than certain other countries. And the GBP remains on my 'to long list'.

My current thoughts are: Long USD , GBP and I still have a soft spot for long AUD.

Vs JPY, CHF, EUR....I still like short CAD but the rising oil price and USD strength make the CAD tricky to trade.

Feel free to email any questions: johnelfedforexblog@gmail.com