The US dollar was dramatically sold off overnight as attention turned back to the FOMC and the likelihood that the present situation will force the Fed’s not to commence tapering in the near term. Gains were more than 200 pips in some instances with the Pound taking 2.6 cents off the Greenback from its low on Wednesday night. The Euro traded up to 1.368 USD, Gold to 1324 USD an ounce but the gains were a touch less for risk currencies, which had already risen considerably this time yesterday but were still up around 100 pips with the Australian dollar trading up to 96.46 US cents putting it just shy of its June 14th high of 96.65 which will be a key level for the Aussie to break.
The forward looking retail sales data from last month was franked overnight by UK monthly retails sales which showed a 0.6% rise. The Pound was already rising but the data helped its steady push up against the Greenback. The data was close to estimates and the Pound was only marginally up versus the Euro and AUD.
Today’s local session see the Australian dollar right in the crosshair with Chinese GDP due for release at lunchtime. Market expectations are for an increase to 7.8% from 7.5% last quarter ending the last two quarters of falling growth levels. We also have Industrial Production and Retail Sales data to add into the mix form China. For those watching the US dollar tonight four consecutive speeches from FOMC members will be closely watched for Fed tapering hints.
Joel Murphy
www.pepperstone.com Joel Murphy is a currency analyst and market commentator for Forex Broker Pepperstone and he regularly features on Sky Business News Australia. He has worked in both retail and institutional Forex for last 8 years and completed a Bachelor of Commerce and a Bachelor of Arts from Monash University
