This morning the dollar index is on the rise again after a volatile, but ultimately positive session yesterday. The Greenback has risen as Fed confirmed that it is continuing its tightening phase. It outlined its plans to shrink its portfolio and signalled a potential rate hike in October.
The dollar pairs were mixed yesterday, with the EUR/USD suffering heavy losses, while the GBP/USD ended up lower, but above the day’s lows.
By contrast, the AUD/USD and NZD/USD closed higher after a volatile session. Both are being dragged lower this morning though.
The yen pairs showed a positive bias, led by the AUD/JPY and the USD/JPY. Activity is muted so far this morning, however.
The EUR/GBP is higher this morning but rallied hard yesterday on the release of better than expected UK retail sales.
Coming up today, we have the BOJ press conference at 07.30.
At 09.30, we have public sector net borrowing.
Following this, we get US unemployment claims and Philly Fed manufacturing at 13.30. At the same time, we get Canadian Wholesale sales.
ECB President Draghi speaks at 14.30.
The EUR/GBP has fallen heavily since mid August, but there is still a lot of room to reverse all of the summer rally.