Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
Kazakhstan Central Bank Holds Interest Rate at 18% as Inflation Pressures Persist 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
Bank of Korea Holds Interest Rates Steady as Weak Won Limits Policy Flexibility 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
BOJ Governor Ueda and PM Takaichi Set for Key Meeting Amid Yen Slide and Rate-Hike Debate 
Japan’s Finance Minister Signals Alignment With BOJ as Rate Hike Speculation Grows 
Fed Officials Split as Powell Weighs December Interest Rate Cut 
Yesterday’s price action post FOMC announcement strongly suggest that the market is more focused and more concerned about the future actions of the European Central Bank (ECB) that the U.S. Federal Reserve.
Yesterday’s policy action, statements, and projections - all were very hawkish; Federal funds rate was increased by 25 basis points along with other rate benchmarks, Fed projected increased growth, higher inflation, lower unemployment, and higher Federal funds rate. Despite that, the U.S. dollar declined against all its major counterparts, especially the euro only after a brief rise. The euro immediately declined after the FOMC announcement from 1.179 against the USD to 1.172 area, but recovered grounds since then and is currently trading 1.183 area.
With Fed, the market is pretty clear that the Fed will hike twice more this year and thrice next year with a constant reduction in its balance sheet. But, with ECB, the market is not certain about the timing of the QE end, tapering projections, and interest rate projections. We believe that market is increasingly focused on the ECB meeting, which is today, as the current bond-buying program of €30 billion per month will expire in September this year.
