Global forex market

AS widely expected, the US Federal Open Market Committee (FOMC) decided to taper the size of its monthly asset purchases by another US$10bil. The committee announced that it will now purchase US$55bil in assets each month – US$25bil in mortgage-backed securities (down from US$30bil) and US$30bil in Treasury debt (down from US$35bil) beginning in April.

The committee revamped its forward guidance on interest rates, moving towards more qualitative than quantitative language with the new guidance paragraph dropping the 6.5% unemployment rate threshold. But the FOMC made it clear that the policy itself has not changed. Most on the committee do not expect to begin hiking rates from the current 0% to 0.25% target range until 2015 or even 2016.