The US dollar failed to benefit from stronger than expected data as bulls seemed disappointed by the lack of hawkishness in the Fed statement. The FOMC kept rates on hold as expected and acknowledged that consumer and business sentiment have improved. They also removed the reference to transitory effects from energy prices on inflation but maintained that gradual tightening is warranted. Initial jobless claims and preliminary non-farm productivity and labor costs are due today.
The euro had a mixed performance as reports came in mostly in line with expectations. Spanish manufacturing PMI beat expectations while final manufacturing PMI readings from its top economies just hit the mark. There are no major reports due from the euro zone today but ECB Governor Draghi’s speech could inspire some volatility.
The pound managed to hold on to its gains even with a lackluster UK manufacturing PMI which dipped from 56.1 to 55.9 as expected. Traders are holding out for today’s Super Thursday with the BOE decision, MPC minutes, and Inflation Report due. No actual policy changes are expected but traders are interested to find out if the BOE is shifting its bias in accordance with Trump’s administration and Brexit issues.
The franc regained ground to the dollar but was mostly weaker to its European rivals. Swiss manufacturing PMI was weaker than expected as the reading fell from 56.0 to 54.6 versus the projected 56.1 figure. Swiss retail sales is due today and a 0.5% year-over-year increase is eyed.
The yen had a mixed performance as it reacted to country-specific data and market sentiment. There were no major reports out of Japan yesterday and none are due today so sentiment and yields could continue to drive yen price action.
Commodity Currencies (AUD, NZD, CAD)
The comdolls took advantage of dollar weakness, with the Aussie leading the pack thanks to strong trade balance and building approvals data. US crude oil inventories posted a larger than expected gain of 6.5 million barrels but the oil-related Loonie seemed to pay no mind. There are no reports due from the comdolls for the rest of the day.