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Back in January, the FOMC made a complete U-turn on its monetary policy stance. FOMC members effectively noted that the balance sheet could be adjusted if need be. Furthermore, the FOMC called for ‘patience’ with future rate hikes. At the time, this generated a large amount of weakness for the greenback. Eyes are on a potential dovish statement from the central bank, with close attention to the language used.

Market participants will be looking for further confirmation that the bank’s hiking cycle is over. As a result, this could potentially force pressure to the downside on the USD, should the market interpret such a tone from the FOMC.

Federal Open Market Committee January meeting minutes are due for release on Wednesday 2018 February 2019 at 1900GMT (03:00 HK/SG)

Here's what they are watch:

  • January meeting codified flexibility, "wait and see" approach
  • Minutes to be read for additional insight on what conditions FOMC would like to see before making the next policy change
  • Particular attention may be focused on balance sheet normalization - Powell's presser indicated the normalization path is flexible, & suggested there was a willingness to use the balance sheet as a tool if economic conditions warranted