USD 

The US dollar had a mixed performance yesterday as traders are trying to reestablish their biases on the US economy. 

On the one hand, the Fed has refrained from tapering while some FOMC officials like Dudley reiterated that the economy is too weak to warrant a reduction of bond purchases. On the other hand, FOMC policymaker Bullard has mentioned that the possibility of tapering in October is still high. For today, US CB consumer confidence data is up for release and a small decline is expected. FOMC member George is also set to give a speech in today’s US session. 

EUR 

The euro was once again weighed down by remarks from ECB head Draghi, as he spoke of the possibility of another round of long-term refinancing operations. Apparently, the drop in excess liquidity and the rise in money market rates is leading ECB officials to worry about a credit crunch and possible risks to recovery. Euro zone PMIs have come in mixed though, with the manufacturing figures in both France and Germany coming in below consensus and the services readings coming in strong. German Ifo business climate data is up for release today and an improvement from 107.5 to 108.4 is expected. 

GBP 

The pound was able to hold on to its recent levels yesterday, despite the lack of data from the UK. BBA mortgage approvals data and a few speeches by BOE policymakers are lined up for today, adding to potential volatility for pound pairs. MPC members Miles, Tucker, and Bean are set to take the stage today and possibly highlight the recent improvements in the UK economy and the reduced need for stimulus, which might help support the pound against its counterparts. 

CHF

There were no major releases from Switzerland yesterday, which explains why it simply stayed in consolidation against the US dollar. There are still no reports due from Switzerland today so USD/CHF might keep moving sideways or be sensitive to US data. 

JPY 

The yen flexed its muscles yesterday, thanks to speculations that the government has its own stimulus package to offset the projected impact of the sales tax. Word on the street is that a cut in corporate tax might be implemented, much to the joy of business owners. This led to a rally in the yen, as traders thought that the BOJ will not need to dole out additional stimulus. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to make much headway in yesterday’s trading, as traders were uneasy about shorting the dollar again. Data from China was better than expected, as the HSBC manufacturing PMI for September rose from 50.1 to 51.2, reflecting stronger export prospects for Australia. No reports are due from New Zealand, as Canada will take the spotlight with its retail sales release. A rebound in spending is eyed, mostly because of the recent improvement in hiring. 

By Kate Curtis from Trader’s Way