USD 

The US dollar had a volatile New York trading session, thanks to the mixed signals from the FOMC statement. 

While policymakers dismissed the recent slump in hiring and spending as purely a result of temporary factors, they also downgraded their outlook for growth and hiring. Yellen clarified that they could make policy changes anytime, not just during the months with a scheduled press conference following the FOMC statement. Markets were unsure how to interpret these figures, although many believe that a June rate hike is off the table because of the bleak 0.2% GDP reading for Q1.

EUR

The euro surged against the dollar and the Kiwi, following relatively downbeat central bank comments for both currencies. Data from the euro zone came in line with expectations, as the German preliminary CPI reading showed a 0.1% dip in price levels. For today, German retail sales and unemployment change figures could have a big say in the shared currency’s price action. Also lined up are Spain’s preliminary CPI and GDP readings.

GBP

The pound extended its gains to the dollar, as there were no major reports to weigh on the British currency yesterday. The only medium-tier release was the CBI realized sales index, which marked a decline from 18 to 12 instead of improving to the estimated 26 reading. There are still no major reports due from the UK economy today as most forex traders are focusing on the upcoming elections and what it could mean for the pound.

CHF

The franc broke out from its consolidation against the US dollar, as the Swiss economy also showed an improvement in data. The UBS consumption indicator marked a climb from 1.21 to 1.35, reflecting an increase in consumer-based indicators. The KOF economic barometer is due today and a climb from 90.8 to 91.6 is expected.

JPY

The yen was mostly stronger in recent trading, as traders moved their safe-haven holdings away from the dollar and towards the Japanese currency. There have been no major releases from Japan then, as traders await today’s BOJ interest rate decision. Earlier today, the preliminary industrial production reading registered a 0.3% dip, better than the projected 3.4% fall.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was a big loser in recent trading as the RBNZ reiterated its dovish bias and confirmed that they could lower rates if economic performance continues to lag. In Australia, import prices fell by 0.2% for Q1 versus expectations of a 1.1% gain. Canadian monthly GDP is up for release later on and strong data could allow the Loonie to advance again.

By Kate Curtis from Trader’s Way