FX markets saw tentative trade heading into the key risk event of the week in the form of the FOMC rate decision amid relatively light news flow. The USD ebbed lower throughout the day amid no fundamental catalyst, generally shrugging off a mixed bag of data points including weekly jobs data (Initial Jobless Claims 264K vs. Exp. 275K) and Philadelphia Fed business outlook (-6.0 vs. Exp. 5.9). The greenback weakness went on to filter through to both EUR and GBP despite the latter seeing below expectation Y/Y readings of UK retail sales (Inc Auto Fuel Y/Y 3.70% vs. Exp. 3.80%).
Elsewhere, the SNB rate decision, with initial strength going through CHF as the central bank rhetoric was less dovish than expected. The SNB noted that the CHF had weakened in recent months, which was interpreted as dovish despite further comments suggesting the CHF was still overvalued. However, the CHF weakness failed to be sustained amid low volatility and as such headed into the close of European markets relatively flat.
Friday’s highlights included BoJ minutes, Canadian CPI and comments from RBA governor Stevens, BoE’s Haldane and ECB’s Coeure.