FOMC gives the dollar a boost, focus shifts to NFP

FOMC gives the dollar a boost, focus shifts to NFP

The USD is broadly higher after minutes from the December FOMC meeting indicated that most members saw an end to QE this year. "Several" members backed slowing or stopping purchases well before the end of 2013 while a "few" members said that asset purchases would likely be warranted until about the end of 2013. The greenback gained on the new guidance regarding QE, however the conditions for the end of asset purchases remain unclear, unlike the specific thresholds for ending the exceptionally low interest rate policy.

Nevertheless, the prospect of an end to QE sometime this year was viewed as a positive for the dollar which gained against all of the G10 currencies except for the JPY.

It is also of note that the next FOMC meeting may be slightly more dovish than the current committee as Rosengren and Evans will be rotating into voting positions. George is likely to replace Lacker as the dissenter and Bullard is likely to lean on the hawkish side.