A weaker dollar, stronger emerging market currencies, tepid euro and yen trading — and Trump risk. These are the main expectations of the foreign exchange community over the coming weeks, as the market digests the Federal Reserve’s split decision to keep policy on hold.

Just as the Fed is engaged in a lively debate on the relative strengths of the US economy, so FX analysts are divided as to whether the central bank’s decision represented a “hawkish hold” or a “dovish hold”.

At MUFG, Derek Halpenny’s takeaway was the Fed had delivered a “strong signal of a rate increase” in one of its remaining 2016 meetings, a view shared by BNP Paribas.

In which case, the dollar might be expected to be strengthening, or at least holding its own. Except it is down across the board, by more than 1 per cent against the Norwegian krone, the South Korean won and the South African rand, and by up to half a per cent against a broad swath of other currencies.

As Commerzbank analyst Lutz Karpowitz says, the market does not believe the Fed. “In poker one would say: the market wants to see. Words alone are not enough,” he says.

It used to be that the slightest signal of policy divergence was enough to boost the dollar. That is no longer enough. Looked at another way, Jeff Greenberg, UBS strategist, points out that pricing for a December hike has risen from near-zero in July to above 50 per cent, “yet the dollar has actually weakened over this period”.

If the dollar is going to rally, the driver needs to be growth differentials, Mr Greenberg adds. In his view the dollar has peaked on a trade-weighted basis against developed market currencies — particularly the euro, which he forecasts to reach $1.16 by the end of the year.

The yen, meanwhile, has stabilised after a rollercoaster five days during which the Bank of Japan changed its targeting strategy, and its currency moved sharply higher against the dollar. But it has been pegged back by half a per cent in the Fed aftermath.

All this points to a solid EM FX rally as risk appetite picks up, with the South African rand in the ascendancy. It is up 6 per cent in the last five days. Brazil’s real has pushed 3 per cent higher in that period.

The fear across EM was a Fed surprise, capping an already volatile period. Relieved, high-yielding currencies such as the Colombian peso, the rand, the Indonesian rupiah and the Indian rupee should do well, says HSBC. Even low-yielders such as the Korean won and the Taiwanese dollar should prosper because of their current account surpluses, the bank adds.

It also expects strong demand for gold: “The longer the Fed puts off a rate hike, the better for gold.”

Central and eastern European currencies should also rise, according to Rabobank, on the back of “one of the most gradual tightening cycles in [the] Fed’s history”.

Could the dollar fall much further? Probably not, says BNP Paribas, not just because it interprets the Fed as being hawkish but because the market was positioned net short going into the meeting.

There is one exception to dollar weakness: it may continue to rise against the Mexican peso, which has come under sustained pressure from the protectionist rhetoric of US presidential candidate Donald Trump, falling more than 8 per cent in the past fortnight.

Other big US trade partners should be worried, says Nomura’s FX strategist Bilal Hafeez. One way of measuring the Trump factor is via FX implied volatility curves. The USD/MXN curve is at extreme levels, but there are signs of some stress in the yen, Canadian dollar and Taiwanese dollar curves.

“Significant scope exists for these markets to price in the ‘Trump’ factor …” says Mr Hafeez.

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