Minutes of the November Federal Open Market Committee’s (FOMC) meeting released on Wednesday were largely unexciting from a near-term policy perspective. After the recent Congressional testimony of Chair Yellen and statements from other Fed officials, the market has fully priced in a rate hike in December. Minutes just cemented December rate hike expectations but did not provide much fodder for markets. 

The minutes of the November FOMC meeting noted a hike was seen as appropriate "relatively soon," with some policymakers saying a December tightening was important to "preserve credibility." The Committee did not make any decision regarding the policy framework that the Fed should move toward as policy is normalized and the minutes showed that officials saw no urgency in deciding soon. Thus, current procedures are expected to be maintained for some time. 

Participants generally agreed that the case for increasing the target range for the federal funds rate had continued to strengthen. Most participants expressed a view that it could become appropriate to raise the target range for the federal funds rate relatively soon, so long as incoming data provided some further evidence of continued progress toward the Committee’s objectives.

Many members judged that risks to economic and financial stability could increase over time if the labor market overheated appreciably, or expressed concern that an extended period of low interest rates risked intensifying incentives for investors to reach for yield, potentially leading to a mispricing of risk and misallocation of capital”. Fed’s Yellen and Fischer cautioned against expansionary fiscal policy when the economy is close to full employment, arguing that measures aimed at boosting long-term growth would be the best option. 

US markets remain closed for Thanksgiving today. USD/JPY hit fresh 8-month highs at 113.53 before slipping to trade at 112.97 at around 12:15 GMT on profit taking. EUR/USD was trading at 1.0573 after making fresh 2016 lows of 1.0518. 

FxWirePro's Hourly USD Spot Index was at 42.7604 (Neutral), Hourly EUR Spot Index was at -17.2784 (Neutral) and Hourly JPY Spot Index was at -121.223 (Highly bearish). For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.