Forex Flash: FOMC gets more explicit – Nomura

FXstreet.com (Barcelona) - After a day that was highlighted by steep declines in the majority of risk assets and a slightly lower US Dollar Index (which did finish well of session lows), some analysts were looking for any differences in the most recent FOMC statement.

According to Lewis Alexander, Economist at Nomura, “Bottom line: Today's FOMC statement, at the margin, highlighted the Committee's willingness to provide additional accommodation, if needed, and placed a greater focus on inflation. At the conclusion of the April 30 - 1 May meeting of the Federal Open Market Committee (FOMC), the Committee made no change in key policy, but subtle changes in the statement packed a punch.”

He went on to add, “Chairman Bernanke has stressed before that the policy statement is designed to give flexibility to monetary policy, which means accommodation could be ramped up, or wound down in light of incoming data and how the outlook evolves. In today's statement, the Committee chose to be more explicit about the prospects of increasing the pace of asset purchases.”