The dollar is softer in the aftermath of the FOMC meeting yesterday, as it appears we might have seen the last rate hike come in by the Fed. I shared some added thoughts on that here.
As much as the dollar is lower, it’s not that bad as this just mostly eats into the rebound from last week. USD/JPY though is still building on the downside push this week, falling back below 140.00 currently amid fears that the BOJ could pull off a surprise and tweak policy on Friday.
The aussie and kiwi are leading gains today, helped out by a better risk mood but also as China continues to defend the yuan on the week. AUD/USD is up 0.9% to 0.6815 currently as buyers build on the bounce from the 200-day moving average on Monday but key resistance is still seen closer towards 0.6900 in the bigger picture.
Looking ahead today, markets are likely to stick with the mood from overnight post-Fed as it is looking like a more straightforward one. The ECB is the highlight of the agenda and a 25 bps rate hike is very much a certainty today. And much like Powel’s presser, I would expect Lagarde to keep the door open for September and allude to being data dependent again. If the euro is counting on Lagarde pre-committing to a September move, it will be disappointed in my view.
0600 GMT – Germany August GfK consumer confidence
1000 GMT – UK July CBI retailing reported sales
1215 GMT – ECB announces July monetary policy decision
1245 GMT – ECB president Lagarde press conference
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.