FOMC & RBNZ Due
The euro has maintained its momentum this week and risk appetite is consolidating gains across different asset classes. So far this year central banks have been willing to maintain a favourable outlook and now the market wishes to see if the Fed will follow suit. There will be no press conference at today’s meeting but even a cautiously optimistic stance may prompt the market to revisit expectations for Fed policy. US Q4 GDP is expected to coming relatively soft at 0.7%q/q but so far the anticipated drags on the outlook, from political deadlock to Eurozone risk, have generally failed to materialise. Nonetheless, growth status continues to elude the dollar as growth expectations have improved far more on a relative basis elsewhere, and we doubt the Fed will be bold enough to change the equation just yet. Elsewhere, the Swiss KoF Leading Indicator is due, and the RBNZ decides late in the session. Overnight EURUSD traded 1.3484-1.3496 and USDJPY 90.67-91.03.
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UBS Investment Bank