DAILY FX WRAP
USD strength dominates proceedings after yesterday’s FOMC statement, with EUR softer after German Employment and CPI
USD-index has traded in positive territory throughout the session and ends the European session higher by around 0.4% as the greenback continued to benefit from participants reaction to yesterday’s FOMC statement. Many have focussed on comments from the FOMC highlighting that job gains had been ‘solid’, despite there was being no new hints that rate lift-off would begin in September. The USD then continued to strengthen during the European afternoon on the back of US GDP Annualized (2.30% vs. Exp. 2.50%, Prev. -0.20%, Rev. 0.60%) with the market focusing on the upward revision to Q1 and strong components, with Business Fixed Investment reaching its lowest level since Q3 2012.
FX news has been fairly light, with the exception of the US today as employment and CPI data from Germany painted a mixed picture, which failed to support EUR against the greenback with EUR/USD breaking below 1.0950 after the additional 9000 unemployed citizens broke a 9 month run of improvements in employment.
Looking ahead, tomorrow sees Japenese employment and PCI data, Eurozone CPI, US Chicago PMI and University of Michigan Sentiment as well as the Russian rate decision, with the central bank forecast to cut their key rate by 50bps, with some analysts forecasting a 100bps cut.