5/16/2012 2:00PM EDT - The FOMC Minutes was released. As far as stimulus goes:
Several members indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough. This is just rhetoric, and actually not as strong as we saw in the previous minutes where stimulus was suggested.
There is also expressed concern in the fallout from further euro area crisis:
Participants identified several downside risks to the projected pace of economic expansion, including the fiscal and financial strains in the euro area and the possibility of an abrupt fiscal consolidation in the United States.
Inflation is balanced, and growth projection has not changed from the last time. Therefore, it is maybe slightly less dovish than the previous.
A more dovish tone would have been a catalyst for the market to retreat from the current USD-onslaught. Instead, this release provides no such trigger, and the USD has a chance to advance further in this risk averse environment we have so far in May.
USD Index daily chart 5/16 2:30PM EDT
The USD Index continues to trade higher, (12 out of the last 13 sessions have been bullish). There is still room to rally before we hit the 2012 high just above 82.00. A break above that opens up the 83.40-83.70 area, resistance in August-September of 2010. A corrective drop should be monitored for buying again near 80.75-81.00