Mundane outlook for currencies continues as traders wait for FOMC verdict.
June 29th - Currency markets are continuing their somewhat mundane run as we approach the weekend break, driven mainly by a lack of commitment ahead of today’s FOMC verdict on interest rates. Speculation that we may have been in line to see as much as a 50 point hike does now seem to be retreating, but without this confirmed, it looks set to be another quiet start to the day. The US weekly jobless claims and Q1 GDP data will doubtless attract some attention in due course as this again may offer some indication as to where inflationary pressures are coming from but otherwise it’s going to be the comments that accompany the Fed’s verdict that stand to provide the real direction. There’s a tendency to see some month- or quarter-end position keeping around now and this does seem to have been on hold, although once there’s a little more clarity as to how the Fed intends to act into the second half of 2006, volatility may well pick up. There’s also a raft of numbers tomorrow ranging from the Michigan consumer data in the US, UK Q1 GDP and Eurozone economic sentiment, but in the short term there’s little to push the major currency pairs out of what are becoming somewhat established ranges.
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