FX Highlights

  • USD is trading mixed and the JPY lower in reaction to a think tank report which says that the FOMC is divided about the timing of when to hike interest rates and that some board members favor an early exit from quantitative ease, BOJ leaves monetary policy unchanged as expected and raises its economic outlook, EU trade balance swells on rising export demand and the EUR trades at a new high for 2009, UK retail sales were flat in August, commodity currencies continue to benefit from rising price of gold, CAD mixed despite report that Canadian CPI rose just 0.1%, SNB holds rate policy steady, says it will continue to counter CHF rise versus EUR
  • Focus turns to today's release of US jobless claims, housing starts and Philly Fed and Canada's CPI
  • Medley Global Advisors says that the Fed is divided over how quickly to raise interest rates once the economy shows sustainable recovery, according to the report two Fed members would support raising rates next week, Gold traded at 14 month high Wednesday
  • BOJ leaves monetary policy unchanged as expected raises economic and financial assessment and moves closer to exit from bond purchases, Japan's Q2 manufacturing sentiment index rises by 15.5%, CAPEX spending falls 22%, Reuters September Tankan manufacturing index at -33 compared to -22 in August, July treasury activity index rises 0.6, BOJ Governor Shirakawa says that strong JPY might support the economy in the long run, JPY lower
  • RBA sold A$576 mln in August compared to A$705 mln in July, Australia's August merchandise imports fall 7%, AUD lower
  • EU July trade balance rises to 12.6 bln from 5.4 mln last month, EUR rises to one year high versus USD but set to open flat
  • UK August retail sales rise 2.1% in CBI orders for September improved -48 from -54 last month, GBP higher
  • NAHB homebuilder index rose for the third straight month to 19 from 18
  • Former Fed Chairman Greenspan worries that politics may hamper the Fed's exit strategy from monetary stimulus and if inflation rears its head it could swamp the bond markets, Greenspan said that Fed may encounter resistance to promote price stability from Congress because of rising unemployment
  • US equity markets set to open higher, European equities 1 % higher, Nikkei closed 173 points higher

Upcoming Events

  • US - Thursday, initial jobless claims for week ending 9/12 will be released expected at 554k compared to 550k last week along with August housing starts expected at 600k compared to 581k last month and September Philly Fed expected to improve to 6 from 4 in August
  • CAN - Thursday, August CPI will be released expected at -0.7% with core CPI at 0.1%, (already released)