Cautious trading as markets await FOMC

A cautious day of trading in the FX markets, with the FOMC announcement ahead prompting some 2 way trade in the lead USD pairs. The USD index has been range bound as a result, though some differentiation of note. Starting the day was AUD under the cosh, hit in the wake of the surprise CPI number which produced a 0.2% fall in Q1 to bring the yoy rate in from 1.8% to 1.3%. We started the day in the low 1.7600’s, but took out the figure to later dip under the 18 Apr low at .7588. Allied to this were some profit taking sales in GBP as Cable met with strong selling interest on a brief return through 1.4600. UK Q1 growth came in as expected, but the yearly rate slightly better than expected to revive some buying interest, but another test through the figure was rebuffed. Later in the day it as CAD in the spotlight as the EIA data registered a build in Crude stocks, and although less than expected, was clearly at odds with the API draw reported the night before. In London am trade we saw the USD/CAD taking out the Friday low at 1.2590 to extend down to 1.2572, but the EIA led sell off in Oil later on saw us back towards the session highs just below 1.2635. USD/JPY was range bound as players here have the BoJ to consider soon after the FOMC, but stock market jitters make this an uncomfortable hold in the interim. EUR/USD is back above 1.1300 again, but is largely buffeted by cross trade flow. NZD pretty range bound for now, holding off the weekly lows ahead of the RBNZ rate decision overnight.