USD weakens broadly post FOMC
What happened overnight
– Euro zone core CPI moderates
– Sweden Q2 GDP revised lower
The USD is broadly weaker in the wake of the FOMC announcement, with the INR, RUB and PLN leading the way. EURUSD has pressed on to new four-month highs around 1.3068, while AUDUSD is approaching the August highs near 1.06. The JPY has underperformed, with USDJPY reversing its pre- FOMC rally and regaining 78, helped by a 9bp backup in the 10-year Treasury yield. Equity markets have posted strong rallies in Asia and Europe, while the S&P future (December contract trades overnight now) has added 0.4% to Thursday’s 1.6% cash rally. In Europe, sovereign yields in Spain and Italy are only modestly lower, but German yields have backed up, narrowing spreads.
Click here to read the full report: FX Daily
Credit Suisse