Daily FX Trading Update: FOMC Decision Coming Up – Jan. 28, 2015

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Daily FX Trading Update: FOMC Decision Coming Up - Jan. 28, 2015

The US dollar gave up ground to its major counterparts in recent FX trading, as traders booked profits off their trades ahead of the FOMC statement today. Data from the US was mixed, with the CB consumer confidence figure improving from 93.1 to 102.9 and new home sales data showing an increase from 431K to 481K. Durable goods orders were weaker than expected. The Fed is likely to repeat its previous statement in saying that interest rates might stay low for a “considerable time” and that they “can be patient” in considering policy normalization. Hawkish remarks could drive the dollar higher while dovish comments could lead to a selloff.

The euro continued to recover against its FX trading rivals, as traders are waiting to see what’s next for the region. There were no reports released from the euro zone then while today has the German GfK consumer climate figure due. The reading could improve from 9.0 to 9.2, which could keep the shared currency supported.

FX Trading News

Despite the lower than expected GDP reading for the last quarter of 2014, the pound was able to benefit from the report since it still marked the strongest annual pace of economic growth for the UK since 2007. The economy grew 0.5% during the quarter, enough to bring the annual GDP to 2.6%, the fastest among major economies. There are no reports due from the UK today.

The franc recovered against some of its FX trading counterparts in recent trading after traders digested the news that the SNB may have staged a small intervention in the forex market. There have been no reports released then and none are due today.

The yen moved to the tune of risk sentiment and advanced to the dollar while giving up ground to the rest of the major currencies. There have been no reports released from Japan then and none are due today, indicating that the currency could continue to take its cue from sentiment and possibly from the FOMC statement’s impact on USDJPY.

The comdolls stalled from their recent FX trading drop, with the Australian dollar seeing some gains after the quarterly CPI release. The report showed a 0.2% uptick, a bit lower than the estimated 0.3% increase and the previous 0.5% gain. The RBNZ is set to make its policy statement in the next Asian trading session and traders might position ahead of a dovish announcement.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.