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Dollar weakness after Fed statement

  • AUD - CPI q/q: 0.2%
  • GBP - Prelim GDP q/q: 0.3%
  • USD - Crude Oil Inventories: -7.2M

The Fed dominated headlines yesterday as the FOMC statement was released. The FOMC announced no changes to the monetary policy, as expected. However, Fed members said the Central Bank would be implementing balance sheet normalisation “relatively soon”. With the risk from the FOMC statement now off the table and the lack of surprise from the statement, investors reverted to the weak Dollar trend we have been seeing of late.

Back in the UK, the GDP figure for the second quarter posted as expected at 0.3%. The Pound rallied prior to the release as the markets expected a higher reading, but the gains were reversed quickly as the figure provided further support for the doves at the BoE. The ONS mentioned the economy had experienced a ‘notable slowdown in the first half of this year.’  The Services sector showed some improvement over the last three months, but a weaker performance was seen from Construction and Manufacturing, which pulled overall growth down. 

  • USD - Core Durable Goods Orders m/m
  • USD - Unemployment Claims
  • USD - Durable Goods Orders m/m

Thursday sees two pieces of key US data released. Firstly, markets will gain an insight into the US Labour market as the weekly jobless claims are released. Simultaneously, US Core Durable Goods hit the wires, forecast to improve on last month’s better than expected 0.3%, to a slightly better 0.4%.