FXStreet (Delhi) – Research Team at MUFG, notes that the US dollar is trading on a firmer footing following the FOMC meeting at which the Fed raised rates for the first time since June 2006. Key Quotes “The Fed’s communication which accompanied the rate hike was less dovish than expected. FOMC’s participants’ projected pace of tightening slowed only marginally signalling that a rate hike per quarter remains likely in the coming years. In contrast the market is still expecting an even more gradual pace of tightening of roughly a hike every six months.” “We still expect the market to adjust to price in a faster pace of tightening during next year supporting a stronger US dollar but it will ultimately depend on the incoming economic data. The Fed signalled as well that future rate hikes will depend more closely on the actual progress of inflation back towards their target which increases the importance of the release of the latest PCE deflator report for November in the week ahead. However, as we head into the less liquid holiday period market direction may become more driven by positioning and year end flows temporarily reducing the importance of fundamental drivers.” For more information, read our latest forex news.