The FOMC minutes confirmed the likelihood of a Fed rate hike in December but the dollar barely advanced after the release, as expectations have been priced in for quite some time already. The transcript showed that most policymakers agreed that the US economy can achieve the conditions necessary to warrant a rate hike next month but cautioned that the next tightening moves would be gradual. For today, initial jobless claims and the Philly Fed index are up for release.
The euro managed to make a bit of a bounce to the dollar, as traders probably booked profits off key levels. There were no reports from the region yesterday, leaving the shared currency under pressure by ongoing uncertainty in France. The euro zone current account balance and ECB monetary policy meeting accounts are due next.
The pound continued to move sideways, as there were no major reports out of the UK. Today has the retail sales figure on tap and a 0.4% decline is expected for October, following the previous 1.9% jump. Positive or stronger than expected data could allow the pound to break higher or resume its climb against its forex peers.
The franc barely made any headway in either direction, as traders are probably waiting for more catalysts. Swiss ZEW economic expectations dropped from 18.3 to 0.0, reflecting a downturn in optimism. Today has the Swiss trade balance due and a larger surplus of 3.18 billion CHF from the earlier 3.05 billion CHF is eyed.
The yen made small gains in yesterday’s sessions, with risk aversion in play. Traders are taking it easy with their yen positions ahead of the BOJ interest rate statement today, as the central bank might shift to a dovish stance now that the country’s GDP indicated a return to recession. Any easing announcements could spur huge losses for the Japanese currency, particularly against the dollar which is eyeing a likely Fed rate hike in December.
Commodity Currencies (AUD, NZD, CAD)
The Loonie continued to rake in more gains as oil prices staged another strong bounce. In New Zealand, PPI readings beat expectations, with input prices up 1.6% versus the projected 0.1% uptick and output prices up 1.3%. There are no other reports due from the comdoll economies for the rest of the day, keeping market sentiment and commodity price movements in control of price action.