Talking Points:
- Australian, NZ Dollars Rebound as Euro Falls Amid Post-FOMC Correction
- S&P 500 Futures Hint Risk-On Mood Likely into the End of the Trading Week
- See Economic Releases Directly on Your Charts with the DailyFX News App
Currency markets were in corrective mode in overnight trade. The Australian and New Zealand Dollars outperformed having trailed their major counterparts in the prior session. Meanwhile, the Euro tracked lower after seeing standout gains in the preceding 24 hours. The single currency pushed higher as commodity bloc FX weakened into yesterday’s close as risk aversion broke out in the aftermath of the FOMC monetary policy announcement.
The Fed said “recent global economic and financial developments may restrain economic activity,” alluding to the tumult that broke out across the spectrum of asset classes in mid-August. The threat of slower US growth against a backdrop of lingering weakness in the Eurozone and China appears to have undermined overall global output bets, weighing on sentiment.
A quiet economic calendar in European trading hours is likely to see risk appetite remain in the driver’s seat. S&P 500 futures are pointing higher, hinting a risk-on mood is poised to prevail into the week-end. This bodes well for higher-yielding currencies while spelling trouble for anti-risk alternatives including the Euro and the Japanese Yen.
