Goldman Sachs' forecasts and trading ideas after yesterday's FOMC meeting

Goldman Sachs shares its expectations and forex trading ideas after yesterday's Fed rate hike.

"In the G10, the currency that retreated most against the USD was the JPY, reflecting the clarity of the BoJ's policy plan in a general environment of rising rates.

We believe that the JPY will continue to fall back on the forex, with our new forecast at 118, 120 and 125 within 3, 6 and 12 months, respectively.

We also believe that the EUR/USD will continue to decline, as the ECB's decision to reduce asset purchases last week reflects a less rigid anchoring on euro area interest rates. We therefore believe that the EUR/JPY should continue to appreciate.

As markets have abandonned the GBP/USD drop at the moment, as a result of UK government members's mixed soft vs hard Brexit messages, we believe the GBP/USD decline remains one of the major themes on the forex for the beginning of next year, with a return of attention to the triggering of Article 50.

Recent developments suggest a rise of the USD/CAD, and this remains our bias as well. But rising oil prices could slow down the movement."