Daily FX Trading Update: Trading Subdued Ahead of BOJ, FOMC, RBNZ

The US dollar had a mixed performance as traders refrained from pushing it in a general direction ahead of today’s FOMC statement. Building permits and housing starts fell short of expectations but analysts remarked that this could just be a temporary pullback. Market watchers are still divided on whether the Fed would hike rates or not, as the latter scenario could keep risk-taking in play while the former could lead to a flight to safety.
The euro was weaker across the board as Brexit jitters continued to weigh on the currency. There have been no major reports out of the region yesterday and none are due today, which suggests that risk sentiment could be the main driving force for euro pairs.
The pound was also one of the bigger losers for the day as traders priced in potential weakness and central bank dovishness in anticipation of Brexit risks. There were no reports out of the UK yesterday while today has public sector net borrowing and the BOE Quarterly Bulletin due.
The franc had a volatile run to the dollar but ended higher against its European rivals. Data from Switzerland fell short of expectations as the trade surplus stood at 3.02B CHF versus the estimated 3.27B CHF figure. The SNB Quarterly Bulletin is up for release today.
The yen raked in gains in a risk-off environment as traders were reluctant to put money in the safe-haven dollar. Still, the upcoming BOJ statement could change the yen’s behavior as additional rate cuts and bond purchases are eyed. Anything disappointing could allow the yen to hold on to its gains and go for more.
Commodity Currencies (AUD, NZD, CAD)
The comdolls recouped some of their previous losses despite weaker than expected quarterly HPI from Australia. The RBA minutes were not as dovish as expected while the New Zealand GDT auction yielded a 1.7% gain in prices. The RBNZ decision is lined up after the FOMC statement but no actual changes are expected.
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.