USD

The US dollar regained ground after the FOMC decided to proceed with its cautious taper and reduce monthly bond purchases by $10 billion, as announced in their December monetary policy statement.

Bernanke also reiterated that the Fed plans to keep interest rates unchanged until the jobless rate stays below 6.5% and inflation reaches the 2% target. US advanced GDP is up for release today and it is expected to print a 3.3% reading.

EUR

The euro gave up some of its recent gains to the dollar when the FOMC statement rolled along. The German GfK consumer climate index actually came in better than expected with a 8.2 reading versus expectations of a small improvement from 7.7 to 7.8. Up ahead, German employment change and Spanis flash GDP data are up for release, which means there might be additional volatility for the euro today.

GBP

The pound was stuck mostly in consolidation to the dollar since there were no major reports released from the UK yesterday. BOE Governor Carney didn’t stir a ruckus in the markets with his speech, as he simply repeated most of its remarks from before. Data on the UK’s net lending to individuals and mortgage approvals are up for release today.

CHF

The franc bounced back to the dollar in recent trading, as the Swiss UBS consumption indicator jumped to 1.80. The bad news though was the previous month’s figure suffered a downward revision from 1.43 to 1.40. The Swiss KOF economic barometer is up for release today and analysts are expecting to see a rise from 1.95 to 2.02, which might allow the franc to extend its gains.

JPY

The yen continued to take advantage of risk aversion in recent trading, packing on gains against the pound and the Australian dollar. Earlier today, Japanese retail sales printed disappointing results, with consumer spending up by an annualized 2.6% versus the estimated 3.9% growth. This was also lower compared to the previous 4.1% increase. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar carried on with its losing ways to the dollar and the yen, despite a quick bounce yesterday. Data from China showed a contraction in the manufacturing sector, as the HSBC final manufacturing PMI dipped to 49.5. The Reserve Bank of New Zealand kept interest rates unchanged, triggering a quick selloff for the Kiwi. No other reports are due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader’s Way