[B]Market Review[/B] - 30/10/2013 [I]21:11GMT [/I]
[B]Dollar rallies broadly after FOMC[/B]
Dollar strengthened broadly against major currencies on Wednesday after the Fed Reserve left its key benchmark lending target, the Fed funds rate, unchanged at 0.25% and kept its 85USD billion monthly asset-purchasing program in place.
U.S. Federal Reserve stated ‘to keep buying $85 billion in bonds per month, split as $40 billion MBS and $45 billion Treasuries; Fed makes no change to it forward guidance on interest rate; data since Sept meeting generally suggests economy continue to expand at moderate pace, recovery housing slowed somewhat in recent months; indicator have showed some further improvement but unemployment remains elevated, fiscal policy restraining growth; repeats that downside risks to outlook have diminished on net since last fall; inflation running below Fed’s goal but longer-term expectations stable; to keep Fed funds at 0-0.25% as long as jobless rate above 6.5%, projected inflation no more than 2.5% vote in favor of policy was 9-1; George dissented from concern over potential imbalances and future inflation.’
The single currency found support at 1.3733 in Asian session and then rose to 1.3768 in European morning. Euro moved higher to 1.3778 in New York morning after the release of weaker-than-expected U.S. ADP unemployment change (130K versus forecast of 150K) and then 1.3787 in NY afternoon before tumbling to a session low at 1.3696.
Versus the Japanese yen, the greenback traded narrowly in Asian and European session before retreating briefly to 98.08 in New York morning due to release of weaker-than-expected U.S. ADP unemployment change and then 98.06 before rallying to 98.69 after the Fed policy statement.
The British pound fell briefly 1.6025 in Asian session, however, failure to penetrate Tuesday’s low at 1.6022 prompted short-covering and lifted price higher in European session. Cable further rose to 1.6079 in New York morning before nose-diving to a session low at 1.5999.
On the data front, U.S. CPI in Sep came in at 0.2% m/m n 1.2% y/y, same as expectation. Germany unemployment change in October came in at 2K, versus the forecast of 0K, previous reading was revised to 24K. Germany Unemployment rate in October came in at 6.9%, same as expectation.
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Data to be released on Thursday: [/B]
New Zealand rate decision, ANZ Business confidence, Australia import price index, export price index, building approvals, Japan manufacturing PMI, BOJ rate decision, housing starts, construction orders, U.K. Gfk consumer confidence, nationwide house prices, Germany Gfk consumer confidence, France PPI, Italy unemployment rate, CPI, HICP, PPI, EU unemployment rate, CPI, Canada GDP, U.S. jobless claims and Chicago PMI.