USD

The US dollar had a volatile run during the actual FOMC statement as it initially rallied on an upbeat announcement but returned its recent gains and more when risk appetite picked up.

FOMC members upgraded their economic assessment, particularly when it comes to hiring and household spending, leading some market participants to keep their hopes up for a September hike. Prior to this announcement, durable goods orders and pending home sales data missed expectations. Only the US initial jobless claims report is due today. 

EUR

The euro was able to rake in gains against the dollar but was weaker against the pound and comdolls. Data from the euro zone was mixed, with the German GfK consumer climate index down from 10.1 to 10.0 versus the projected 9.9 reading and German import prices up 0.5% versus the projected 0.6% increase. German preliminary CPI and unemployment change reports are due today. 

GBP

The pound barely reacted to the upbeat UK GDP reading, which showed a larger than expected 0.6% expansion versus the projected 0.5% growth figure and the previous 0.4% reading. UK CBI realized sales slipped from 4 to -14, far below the projected dip to 2. Only the UK GfK consumer climate index is due today and a rise from -9 to -7 is eyed.  

CHF

The franc regained ground to the dollar and its European counterparts as the UBS consumption indicator rose from 1.24 to 1.34. There are no reports due from the Swiss economy today so risk sentiment could push franc pairs around. 

JPY

The yen lost ground to most of its peers when reports suggested that the government was ready to announce a much larger stimulus program than previously anticipated. However, traders quickly booked profits now that the actual BOJ statement is approaching. Prior to this, Japan will release its inflation, retail sales, and industrial production figures in the next Asian session. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls were big winners when risk-taking resumed, as the oil-related Loonie even managed to shrug off the buildup in US crude oil inventories. Australia’s CPI came in line with expectations of a 0.4% increase while the trimmed mean CPI posted a higher than expected 0.5% gain. Australian import prices are due next. 

By Kate Curtis from Trader’s Way