Dollar recovered mildly overnight after FOMC kept rates unchanged near zero and reiterated that "it can be patient in beginning to normalize the stance of monetary policy." The statement overall suggested that Fed is still on schedule to raise interest rate after mid-year. And that disappointed some dove that speculated Fed might signal a delay in rate hike due to low inflation and recent easing campaign by other global central banks. Stocks tumbled with DJIA losing -195.84 pts, or -1.13% to close at 17191.37. Meanwhile 30 year yield tumbled to new low of 2.294. Dollar index is back above 94.6 but is held below recent high of 95.48. Regarding the economy, Fed noted in the statement that "activity has been expanding at a solid pace." Also, it noted that "labor market conditions have improved further, with strong job gains and a lower unemployment rate." That's an upgrade to prior assessment of growth of "moderate pace".
New Zealand dollar tumbled after RBNZ kept rates unchanged at 3.50% and shifted to a neutral stance. The central bank said in the statement that "in the current circumstances, we expect to keep the OCR on hold for some time." More importantly, "future interest-rate adjustments, either up or down, will depend on the emerging flow of economic data." In the prior statement, RBNZ said that "some further increase in the OCR is expected to be required at a later stage" which was a clear tightening bias. Regarding the exchange rate, the central bank expected "a further significant depreciation" from the current unsustainable level. Kiwi was also weighed down by trade data which showed NZD -159 deficit in December.
Elsewhere, Australia conference board leading index rose 0.1% in November while import price index rose 0.9% qoq in Q3. Japan retail sales rose 0.2% yoy in December. Looking ahead, German unemployment and CPI, Eurozone M3 and confidence indicators, and UK CBI report sales will be released in European session. US will release jobless claims and pending home sales.