- While the vote at the December FOMC meeting was unanimous, there was some dissension in the ranks regarding ending the MBS purchase program
- ADP employment report says 84,000 US private-sector jobs lost in December
- Non-manufacturing ISM index 50.1 in December; employment 44
- Greek FinMin: Stark comments “Not helpful”
- US yields dip after FOMC minutes; US 2-year note 1.0%; 10-year note 3.83%
- Commodities rally on reflation hopes; oil closes above $83, gold climbs to $1140, +$20
- S&P 500 flat late in the session.
EUR/USD firmed in US trading as real-money flows supported commodities and currencies today as fresh investment is put to work early in the quarter. The rally accelerated after the dovish FOMC minutes. EUR/USD tested resistance at 1.4433 before stalling.
AUD/USD was in heavy demand today with buying accelerating above former resistance at 0.9075. Stops were triggered above 0.9200 with Oz ultimately reaching 0.9217 before stalling.
USD/JPY traded firmer for much of the US session as firmer US bond yields (until the FOMC) and interest to sell the JPY versus AUD helped support the greenback. Hopes that incoming finance minister Kan will be more mercantilist in his thinking (tending to favor a weak yen) helped soften the JPY today. Prices rallied to 92.75 at midday before falling back to 92.35 after the FOMC where it bounced.
Cable was weak versus the EUR today as PM Brown faces a leadership challenge. The devil you know is better than the devil you don’t, the market seems to think. EUR/GBP reached 0.9012 intraday while GBP/USD recovered back above 1.6000 as the dollar lost ground later in the day.
