Dovish Yellen Still Retains Hawk-Like Oversight

The Federal Reserve has stuck to its pledge to keep interest rates near zero for a “considerable time” after it stops buying assets, all the while outlining a strategy to exit from six years of unprecedented easing. The net result is worth noting: that Yellen is more in control of Federal Open Market Committee than the market has given her credit for and the regional Fed presidents, it seems, have less control than previously thought.

The market's initial reaction is to extend the last few weeks' trade of stronger USD and higher yield but considering that the statement did not move the needle and the FOMC remains very cautious I expect these trends to reverse when the "final analysis" comes in. To see the Fed statement tracker - WSJ Fed remains cautious - WSJ Fed keeps "considerable time" - MNI News

I still see that we are in the peak of the USD strength cycle - the biggest take away for me is that Yellen has kept control. She was more dovish in Q&A than in her statement, hence the "counter-balance" is from regional bank presidents but Yellen, Dudley and Fischer still control the game plan.

However today's CPI is of concern. Deflation is coming to the US. This, of course, is denied by the hawkish camp - the same names which said Europe was in no danger less than six months ago.
The world is still in the process of dealing with credit debt mountains, the end of monetary cycle, a China which can't get its engine restarted and a Europe where the second biggest economy no longer is in recession but depression.

Furthermore the Scottish Referendum is showing a clear trend towards domestic/local focus over international/free trade. In other words: anti-globalisation is the new trend and the biggest losers over time may be the US. What this means in trade terms: Buy EURUSD spot here 1.2875 with a firm stop loss @ 1.2810 offered.