A tepid session today in Asia as traders look ahead to the FOMC and BOJ rate decisions due later today and tomorrow respectively. Today saw the dollar struggling to maintain New York session highs, while the Yen continued to firm despite comments out of the BOJ that they are currently monitoring the FX markets. The EUR/USD continued to drift higher off of its 1.3640 New York lunch time low, reaching 1.3695 in late Asian trading to post a 20 pip gain for the session. An agreement to help Greece financially if called upon failed to excite investors who were unable to find any details on the program. GBP/USD continued to drift between the 1.5040 to 1.5070 range with no spark to help it break out in near term sights.
The Yen continued to firm despite the BOJ trying to talk it down with perceived threats of intervention. Yen crosses fell to daily lows of 123.20 for the EUR/JPY, 135.45 for the GBP/JPY, and AUD/JPY touching $82.25 lows. The Bank of Japan will finish its two day meeting on Wednesday and although rates are expected to remain at 0.10%, many expect a continuation of currency easing by the central bank.
As well, tomorrow brings the much anticipated FOMC rate decision, where once again, the rate is expected to remain unchanged at <0.25%, but traders will be monitoring the following commentary closely. Most market watchers expect the FOMC to continue with its “extended period” statement in regard to keeping interest rates low. Another key feature to keep an eye on is if there is more than one dissenter to the “keeping rates low for an extended period” idea. One FOMC president dissented last month, and in the wake of an improving US economy, that single dissenter could find company, and if so, violent moves in the currency markets.