US data under scrutiny ahead of FOMC statement
City Index July 31, 2013 2:26 PM
<p>The US dollar has a slight bid bias going into the European open as the market adjusts positioning going into a busy US data session. […]</p>
The US dollar has a slight bid bias going into the European open as the market adjusts positioning going into a busy US data session. Month end rebalancing is also likely to play a dominant role in proceedings. The large investment houses seem to be pointing to the rebalancing flow being dollar negative across the G10 currency space following global equity markets reversing their declines of June along with bond markets. The outperformance of the US market is possibly leaving asset managers under hedged dollars.
Today is looking a lot more eventful, with EU HICP readings and the unemployment rate released at 10am. The US session brings us the ADP report, Q2 GDP and Chicago PMI data, followed by the FOMC statement at 7pm.
The market has revised down its US GDP forecasts in recent weeks following a slew of weaker US data. The consensus is looking for 1%. The July FOMC meeting has no post press conference so the market will be scrutinising the statement for any timing on QE tapering. The understanding is that Bernanke will already have seen the GDP data, ISM number, jobless claims and manufacturing sectors contribution to Friday’s NFP data.
The market will also be looking for any change in the Fed’s remit in the FOMC statement this evening with regards to the Hilsenrath article last week that suggested the Fed may lower its unemployment target to offset the fall in the participation rate in the US labour market.
Supports 1.3220-1.3195-1.3160 | Resistance 1.3300-1.3340-1.3380
Supports 97.50-96.95-96.30 | Resistance 98.20-98.80-99.30
Supports 1.5150-1.5065-1.5020 | Resistance 1.5255-1.5300-1.5340
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