Previous session overview
On Tuesday, the euro mounted an unexpected rebound against the dollar and yen as traders reversed the selloff on swine flu fears a day earlier.
European policymaker comments Tuesday sharply contrasted expectations for the Fed's meeting Wednesday, and favored flows to the euro.
European Central Bank executive board member Bini Smaghi cautioned against further aggressive interest-rate cuts in the euro zone, while the FOMC is seen leaving its fed-funds rate unchanged near the zero mark.
The euro rose against the U.S. dollar and the yen in Asia Wednesday, building up on gains posted Tuesday after a top official hinted that rate cuts in the euro zone may end soon.
Yesterday Euro was able to rebound sharply once again after testing below USD1.3000 in Europe helped by the improving U.S. data and comments by European Central Bank Executive Board member Lorenzo Bini Smaghi, who suggested a foray into quantitative easing by the bank was not yet a done deal.
The British pound rebounded after falling to as low as USD1.4518 against the dollar in European morning as Confederation of British Industry said U.K. index of retail sales rose this month to the highest level since January 2008 as stores overcame the recession and rising unemployment.
The Japanese yen hit a one-month high against the US dollar and a seven-week high against the euro after the Wall Street Journal reported regulators have told Citigroup and Bank of America they may need to raise more capital based on early results of government stress tests on banks' ability to withstand the economic crisis.
The Australian dollar was stronger late Wednesday buoyed by a positive turnaround in risk appetite as swine flu fears abated somewhat and U.S. consumer sentiment improved. The currency appears to have stabilized over the past month and a half on the back of recent data affirming a more positive outlook for the global economy.
Market expectation
The euro and dollar are rebounding against the yen Wednesday with risk-taking back in vogue, at least for now.
European stocks are expected to open modestly higher, supported by an almost flat close on Wall Street, even though traders remain cautious ahead of details of the capital requirements of the U.S. banks and the impact on the global economy should further injections be required.
EURUSD currently holds off highs into early Europe, but underlying tone remains firm. Offers seen placed to USD1.3220 (USD1.3222 76.4% USD1.3302/1.2964), a break above USD1.3225 to open a move on toward USD1.3250/55 ahead of stronger interest placed around USD1.3300. Support remains at USD1.3120/00, a break below to open a deeper move toward USD1.3060/50.
For Pound offers remain in place to USD1.4730, a break here to open a move on toward USD1.4750 ahead of USD1.4770/80 (recent rally high USD1.4774). Below USD1.4700 support seen placed at USD1.4675/70 ahead of USD1.4655/45 and USD1.4620.
Analysts say investors are also cautious ahead of the U.S. Federal Reserve interest rate announcement expected around 1815 GMT, and the release of first quarter U.S. economic growth data at 1230 GMT.
Most important events of the day
| 29-Apr | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 2:00 | NZ | Credit Aggregates | Mar | % y/y | Low | |||
| 2:00 | NZ | Monetary Aggregates M3 | Mar | % y/y | Low | |||
| 7:00 | ES | Retail Sales | Apr | % y/y | Low | |||
| 7:15 | SE | Consumer Confidence | Apr | Index | Low | -14.5 | -16.5 | |
| 7:15 | SE | Economic Tendency Survey | Apr | Index | Low | 71.8 | 70.1 | |
| 7:15 | SE | Manufacturing Confidence | Apr | Index | Low | |||
| 8:00 | NO | Unemployment (AKU/LFS) (sa) | Jan-Mar | % rate | Low | 3.2 | 3.1 | |
| 8:00 | EU | M3 (sa) | mar | % y/y | Low | 5.7 | 5.9 | |
| 8:00 | EU | M3 3 month (sa) | mar | % y/y | Low | 5.9 | 6.5 | |
| 8:00 | IT | Hourly Wages | Mar | % y/y | Low | 3.5 | 3.5 | |
| 8:00 | IT | Hourly Wages | Mar | %m/m | Low | 0.2 | 0.3 | |
| 8:30 | BE | CPI | Apr | % m/m | Low | |||
| 8:30 | BE | CPI | Apr | %y/y | Low | |||
| 9:00 | IS | CPI | Apr | % m/m | Low | -0.2 | -0.6 | |
| 9:00 | IS | CPI | Apr | % y/y | Low | 11.2 | 15.2 | |
| 9:00 | EU | Business Climate | Apr | index | Low | 3.53 | -3.58 | |
| 9:00 | EU | Economic sentiment | Apr | index | Low | 65.6 | 64.6 | |
| 9:00 | EU | Industry sentiment | Apr | index | Low | -36 | -38 | |
| 9:00 | EU | Consumer sentiment | Apr | index | Low | -33 | -34 | |
| 9:30 | CH | KOF leading indicator | Apr | index | Med | -1.9 | -1.79 | |
| 12:30 | US | GDP Annualized (A) | Q1 | % q/q ann | High | -3.8 | ||
| 12:30 | US | Core PCE Price Index (A) | Q1 | index | Med | 1.2 | 0.9 | |
| 13:00 | BE | GDP (P) | Q1 | %q/q | Low | -1.7 | ||
| 13:00 | BE | GDP (P) | Q1 | %y/y | Low | -0.8 | ||
| 14:00 | EU | ECB Governing Council Member Weber speaks in Munich at an event organised by the Bundesbank | Low | |||||
| 15:30 | EU | ECB Executive Board Member Stark to speak in Siegen on "Fighting the crisis: market versus state" | Low | |||||
| 18:15 | US | FOMC interest rate announcement | High | |||||
| 21:00 | NZ | RBNZ Official Cash Rate Announcement (09:00 NZST on 30th Apr) | High | |||||
| 22:45 | NZ | Building Consents | Mar | %m/m | Low | |||
| 22:45 | NZ | NBNZ Business Confidence | Apr | index | Low | |||
| 23:01 | GB | Gfk Consumer Conf. Survey | Apr | Index | Low | |||
| 23:15 | JP | Reuters PMI | Mar | index | Low | |||
| 23:50 | JP | Industrial Production (P) | Mar | % m/m | Med | 0.8 | -9.4 | |
| 23:50 | JP | Industrial Production (P) | Mar | % y/y | Med | -34.7 | -38.4 |
