Dollar Weakness Continues as FOMC Disappoints

We had an interesting day yesterday as the first half of the day was more about consolidation and ranging and the real action began only during the latter half of the day. The latter half saw the release ADP Unemployment data from the US which was better than expectations and this raised hopes for the NFP data that is due out tomorrow. The Fed had made it clear that it would be looking to hike rates in the coming months if the economic data, especially the employment data, continues to be good and this would have helped the dollar gain immensely. But the strength in the dollar was short lived as the FOMC statement came out a few hours later and this proved to be a dampener on the dollar rally.

Hence we have seen the EURUSD make a move towards 1.0800 once again and we have also seen the USDJPY crash below 113 again as well. The big gainer seems to have been the pound as the GBPUSD pair trades just below 1.27 as of this writing and continues to look strong. The pound will be helped further in its rally today if the BOE comes out with a strong statement of intent to deal with issues and the fallout from the Brexit process when it releases the BOE policy meeting minutes. The BOE is expected to keep the rates on hold but the minutes is expected to touch upon the Brexit process and how they plan to supplement the efforts of the government. This will be the key data point for today.

The other important data of note would be the unemployment claims data from the US but considering the fact that the NFP is scheduled to the released tomorrow, we do not expect this piece of data to have too much of an impact on the market today.
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