Daily FX Trading Update: FOMC Holds, Dec Hike Still Possible?

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USD
The US dollar gave up ground when bulls were disappointed to find out that the Fed still kept interest rates at <0.50% for now. Still, Fed officials kept the door open for a December hike by highlighting the improvements in hiring and spending, explaining that the case for tightening has strengthened. Yellen noted that they will continue to monitor labor market improvements before gauging if a hike in November or December is due. US existing home sales and CB leading index are on tap for today.
EUR
The euro continued to sink against its forex peers, except against the US dollar. There have been no major reports out of the region yesterday, as it appears that the downbeat outlook for the UK and European trade activity from last week is still weighing on the shared currency. ECB Governor Draghi has a testimony lined up for today and the euro zone consumer confidence index is up for release.
GBP
The pound made a quick bounce to the dollar but was still weaker across the board. UK public sector net borrowing data beat expectations but returned to a deficit of 10.1 billion GBP. UK CBI industrial order expectations data and speeches by MPC members Carney and Cunliffe are lined up today.
CHF
The franc regained ground to the dollar and European currencies but caved to yen strength. There have been no major reports out of the Swiss economy yesterday and none are due today, keeping the franc acting as a counter currency and likely chalking up another mixed performance.
JPY
The yen had a bit of a selloff after the BOJ’s decision to shift from inflation-targeting to targeting the yield curve. It also unveiled plans to launch more aggressive easing efforts but weren’t enough to keep yen bears in play. Japanese banks are closed for the holiday today.
Commodity Currencies (AUD, NZD, CAD)
The comdolls took advantage of dollar weakness as low borrowing costs for much longer could keep global growth supported. The Kiwi had a brief dip after the RBNZ sat on its hands but hinted that further policy easing would be made. Meanwhile, the Loonie bounced slightly on the US EIA report, which showed a draw in crude oil stockpiles. New RBA Governor Lowe has a speech lined up today.
To contact the reporter of the story: Samuel Rae at samuel@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.