Dovish or hawkish? The market can’t seem to make up its mind over what to make of the statement that accompanied the Federal Reserve’s latest interest rates decision.

The DXY index – which measures the dollar against a basket of its major trading partners, was up 0.5 per cent ahead of the Fed’s decision. The gain evaporated to just 0.1 per cent after the decision came out but then rallied again before retreating to trade 0.3 per cent higher at pixel time.

Investors have been hoping the Fed would offer more clues to the timing of its next interest rate rise. But as Joshua Shapiro, chief US economist at MFR noted:

Nothing in the statement either further opened or closed the door to a tightening move on March 15. If that is to occur, it will most certainly have been well flagged by Fed-speak in the interim. Our view remains that June is a more likely time for the move than March, but a reasonable case for March could certainly be made if economic data continue to come in on the stronger side.

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