The Federal Reserve raised rates yesterday, as expected by the market. The statement and projections were slightly more hawkish though, with the central bank saying that the recent weakness in inflation is largely transitory. The US Dollar came under pressure ahead of the FOMC, due to soft inflation and retail sales numbers, but recovered after the announcement.
The Australian Dollar rallied overnight, after stronger than expected employment data. AUD/USD rose from 0.7585 to a high of 0.7630. The pair eventually lost momentum, as resistance around 0.7630 proved again to be tough. However, the outlook is positive and intraday support is now seen at 0.7570 and 0.7520.
The New Zealand Dollar had a weak performance after NZ GDP data missed expectations. NZD/USD fell from 0.7310 to 0.7230 overnight. A break below 0.72 support could signal a pullback towards 0.7120 support.
Price action in the other major pairs was unusually quiet. The Euro is again consolidating around 1.12, while USD/JPY is struggling to get back to 110.
Today, both the Swiss National Bank and the Bank of England will decide on interest rates. No changes are expected, but the BoE meeting could be more interesting as inflation continues to rise in the UK.
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