FXStreet (Guatemala) - Analysts at Rabobank noted the FOMC that was hardly the storm that we were setting up for. Key Quotes: "Well, what an anti-climax. (And fortunately I’m still talking about the Fed, not Star Wars, where despite fervent attempts to steer clear of spoilers ahead of a viewing, I couldn’t avoid hearing that the critical response seems to be good.) In short, the Fed raised rates 25bp as expected.Moreover, it (surprisingly) did not shift its projected “dot plot” much lower, sticking with the belief that it can raise rates a further four times in 2016 and another four in 2017. (Or, in other words, an average of 25bp every quarter until we hit “normal” rates at around 3.50% again). Yet Janet Yellen went out of her way to calm markets by repeatedly stressing this is “data dependent”, so is not so much a promise as a statement of general intent. Indeed, as our bang-on-the-money-with-his-December-call Fed-watcher Philip Marey notes in his review of the meeting, it’s pretty unlikely that we will actually get those four hikes next year, and he thinks two is more realistic, all things considered. So what was the reaction in markets? Well, US equities closed the session up 1.5% (though I struggle to see why: if there are four hikes coming, they should have gone down; and if there are fewer hikes, it is will be because of bad data). In rates, US 2-year yields oscillated but closed up at over 1.0%, their highest since mid-2010, while 10-year yields only edged 3bp higher to 2.30% (certainly a more cagey response). In FX, the USD index tanked and then rebounded to close very slightly higher on the day at 98.4, albeit still around 2% below the highs we recorded in both March and November this year. In short, nothing to indicate that there has been an Awakening. Yet... Of course, today is when most emerging markets will get their first chance to show what they think of a development that arguably has an outsize impact on their already-reduced prospects going forward. We’ve certainly started off on the wrong foot in Brazil, which got a second ‘junk’ rating, this time from Fitch, which has help to push BRL down to a 7-week low of 3.88. How will South Africa react after its recent ‘Whoops ZARpocalypse’ moment, for example? Perhaps of greatest interest today, however, will be the reaction from China, as CNY slipped to 6.4726 yesterday, the weakest level since mid-2011. Since the start of November CNY has now dropped 16 big figures: extending that trend to the end of December would suggest we could reach at least 20 big figures (i.e., a drop from 6.31 to 6.51). And if we were to extend that projection again to the end of 2016 that would then put USD/CNY at around 7.70...which is where my “ultra-bearish” CNY forecast currently rests. That will be one additional factor for the Fed to be thinking about next year, no doubt, if it isn’t already, especially as the rate hike decision was preceded by a 0.6% m-o-m plunge in US industrial production, with capacity utilization rate plunging back to 77.0%, the lowest since January 2014." For more information, read our latest forex news.