A choppy NY session highlighted by the Fed rate decision ended with the dollar near recent lows and JPY crosses higher. However, Asia came in and faded the move as EUR/JPY traded back under 167 and EUR/USD backed away from all-time highs. USD/JPY couldn’t get above 115.50 which also helped capped the topside for the JPY crosses.
Australia released September retail sales at .8% better than expectations of .5% while the trade balance widened to -1,862 worse than expectations of -1,000. The mixed data initially sent AUD/USD higher but offers into .9350 capped the topside and we saw it trade back under .9300, below levels before the release.
Looking forward, the focus in the markets is on remaining US economic data including the crucial Non-farm Payrolls. Earlier today, US Gross Domestic Product came in at 3.9% much higher than expectations of 3.1% as the economy continues to shrug off housing woes. Could the markets be underestimating the strength of the US economy? Further, what impact will this have on the USD? Expect further fireworks for the remainder of the week.
Upcoming Data Releases (London Session):
- Switzerland: (4:30am ET) SVME Purchasing Mangers’ Index expected 58 vs. previous 57.6 (relevance: medium).
- UK: (5:30am ET) PMI Manufacturing expected 54.5 vs. previous 55.1.
