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A Fed hold, a Warsh non-answer, and one day of cover for the Japanese Yen
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FXStreet Forex & Commodities News
The hold dated the hike rather than cancelling itThe decision came on a nine-to-three vote, three voting members dissenting in favour of a quarter point, the closest call in years.
Futures carried a hike tail near 36% into the meeting, up from roughly 11% in mid-July, and that premium came out of the front end on the announcement.
That divergence between the curve's two ends is the whole story for a carry pair, because a hold with three hawkish dissents dates a hike rather than cancelling it.
The Yen stopped trading the differentialThe pair recovered half its post-decision drop inside two hours because the transmission channel has moved.
Above it, 165.00 is where intervention chatter concentrates, which makes it a target and a hazard at the same time.