Daily FX Trading Update: USD Retreats Ahead of FOMC – Apr 27, 2016

Daily FX Trading Update: USD Retreats Ahead of FOMC - Apr 27, 2016
The US dollar retreated to most of its forex peers on downbeat data released yesterday. Headline durable goods orders were up 0.8% versus the projected 1.9% gain while core durable goods orders fell 0.2% instead of showing the estimated 0.6% rise. The flash services PMI improved to 52.1 but fell short of expectations at 52.3 while the Richmond manufacturing index slid from 22 to 14. The FOMC is set to announce their monetary policy decision later today and no actual changes are expected but traders are waiting to find out if a June rate hike is still in the cards.
The euro had a mixed performance as it rallied then reversed to the dollar, advanced against the yen, and weakened to the pound. There were no major reports out of the euro zone then, which explains why the shared currency simply reacted to country-specific events and market sentiment. German import prices and the German GfK consumer climate index are due today.
The pound was still one of the strongest performers but it gave up a bit of ground upon seeing the latest ICM poll results, which indicated that 46% of those included in the survey are voting for a Brexit. The UK preliminary GDP reading is up for release today and a 0.4% growth figure is eyed, lower than the previous 0.6% expansion.
The franc took advantage of dollar weakness but was still mostly weaker against its other counterparts. There have been no major reports out of Switzerland yesterday while today has the UBS consumption indicator on tap. A reading higher than the previous 1.53 figure could give the Swiss currency a boost.
The yen continued to lag against its forex rivals as traders keep pricing in expectations for additional easing or dovish remarks from the BOJ statement this week. There were no reports out of Japan yesterday while today has the all industries activity index on tap. Analysts are expecting to see a 1.3% decline after the report previously printed a 2.0% gain.
Commodity Currencies (AUD, NZD, CAD)
The comdolls continued to take advantage of dollar and yen weakness but were no match to pound strength. Data from New Zealand was weaker than expected, as the trade surplus fell short of estimates. In Australia, the quarterly CPI is due and a 0.3% gain in price levels is eyed. Crude oil inventories data is lined up ahead of the RBNZ rate decision in the late US session.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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