The US dollar gave up ground once more, as the FOMC minutes seemed less hawkish than expected. Fed officials acknowledged that the slowdown in China poses additional uncertainties for the global and domestic economy, although their outlook hasn’t changed materially. Policymakers emphasized that they’d like to see more labor market progress and be reasonably confident that inflation would move closer to its 2% target, but latest reports haven’t been so impressive. For today, import prices data and speeches from FOMC members Lockhart and Evans are lined up.


The euro took advantage of dollar weakness but was unable to stay afloat against most of its other rivals, particularly the commodity currencies. The ECB minutes seemed to be in line with analysts’ expectations, although ECB member Weidmann reiterated that further easing isn’t warranted just yet. French and Italian industrial production numbers are up for release today and more signs of weakness could mean more losses for the shared currency.

The pound gave up ground in recent trading, except against the US dollar, thanks to a downbeat BOE statement. The central bank sounded less hawkish than it used to be, as policymakers admitted that the downturn in China led to a weaker inflationary outlook and might lead them to push back their tightening time line. Only one member voted to hike rates as usual while the rest agreed to keep the status quo. The UK trade balance is up for release today and a smaller deficit of 10 billion GBP is expected.

The franc advanced against the US dollar but was in a weak spot against its other forex rivals, as the Swiss jobless rate ticked up from 3.3% to 3.4% as expected. No other reports were released from Switzerland but the dovish ECB outlook kept franc traders wary of potential intervention from the SNB. There are no reports due from Switzerland today.
The yen had a mixed performance as it acted mostly as a counter currency, as data from Japan came in mostly weaker than expected. The core machinery orders report showed a surprise 5.7% decline versus the projected 3.3% increase while the Economy Watchers Sentiment index slipped from 49.3 to 47.5. There are no reports due from Japan today, leaving yen pairs sensitive to risk sentiment.
Commodity Currencies (AUD, NZD, CAD)

The comdolls continued with their recent rallies, advancing to the European currencies and safe-havens. Data from Canada was mostly stronger than expected while the pickup in oil prices also added support for the Loonie. Canada is set to print its jobs report today and might show a 10.5K increase in hiring, enough to bring the jobless rate down from 7.0% to 6.9%. Earlier today, Australia reported a meager 2.9% gain in home loans instead of the projected 4.9% increase.


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