News & Data:
Most agree that the FOMC statement reads dovish with focus on the inflation outlook, international developments, and emphasis on the line that "many" officials are included to stay at zero longer. However, this is just one of 4 major near-term events that could determine the direction of the USD. Fed Chair Yellen will speak at a Senate testimony next week. Following that, the market is looking forward to the NFP number for February in 2 weeks and the March FOMC statement.
There was also some discussion around the forward guidance language within the FOMC. The minutes show that "Many participants regarded dropping the 'patient' language in the statement as risking a shift in market expectations for the beginning of policy firming", which means that the Fed is worried about losing flexibility regarding the timing of an initial rate hike. The FED will probably keep the 'patient' phrase in March, with the possibility of a June rate hike.
The USD fell across the board after the minutes release. GBP/USD, which received already a strong boost in the European session after UK employment data, extended gains towards 1.5480. EUR/USD made it back above 1.14, though further consolidation seems likely and hence, selling rallies towards 1.1490/1.15 the favored strategy. USD/JPY fell to a low of 118.40 overnight and the focus is now on the 118.20 support area. Meanwhile, the commodity currencies failed to gain much against the US Dollar. The Canadian Dollar weakened despite the dovish FED minutes, as Oil prices are declining.
Looking ahead, we have a rather light econ calendar for today. The focus will be on US Initial Jobless Claims data at 1330 GMT and the Philadelphia Fed Manu Index at 1500 GMT.