The US dollar sold off then recovered during the release of the FOMC minutes, as the transcript still contained some degree of caution from policymakers. Still, most committee members acknowledged that the September decision was a close call and that the case for tightening has strengthened. US initial jobless claims and import prices are due today, along with crude oil inventories.
The euro was mostly weaker for the day after headlines noted that the yield spread between German and US bonds has fallen to their lowest level in ten years. Medium-tier economic reports came in line with expectations, with euro zone industrial production up 1.6% versus 1.4%. Only the German final CPI reading is up for release from the region today.
The pound made a quick bounce after UK Prime Minister May assured that Brexit terms are still negotiable, calming market fears that the UK would lose access to the single market. BOE Governor Carney will have a testimony later today and more words of reassurance could allow the pound to recover.
The franc gave up ground to most of its rivals, except for the euro. Swiss ZEW economic expectations improved from 2.7 to 5.2. There are no reports lined up from the Swiss economy today so market sentiment could play a role in price action.
Yen pairs tossed and turned during the release of the FOMC minutes as traders moved some of their yen holdings to the safe-haven dollar. Japan’s preliminary machine tool orders report saw a smaller 6.3% drop compared to the earlier 8.4% tumble. The tertiary industry activity index is due today and a 0.2% dip is eyed.
Commodity Currencies (AUD, NZD, CAD)
The comdolls managed to put up a fight against the dollar during the release of the FOMC minutes but soon gave back their gains upon seeing weak Chinese trade data. The surplus narrowed from 346B CNY to 278B CNY, indicating weaker demand. Oil and the Loonie retreated when a report from the OPEC revealed a pickup in production as countries likely ramped up their output in anticipation of a production cap.