A slow start to what could be a big week, headlined by the FOMC meeting, which will almost certainly discuss ‘tapering’ of QE. Will the denial of inflation remain part of the narrative? The Dallas Fed Manufacturing Index was lower than expected and US New Home Sales fell 6.6%. The strong economic recovery is looking challenged and combined with debt and inflation, is in a bit of a pickle. The USD was softer, allowing the EUR to regain 1.1800, while the GBP pushed back above 1.3800.
The German IFO Business Climate was weaker than expected, as European markets suffer further restrictions from a resurgent virus. The people are protesting out in the streets across Europe and Australia, seemingly unwilling to suffer further lock-downs and restrictions? The commodity currencies had to consolidate with the softer reserve, with the AUD trading 0.6775, while the NZD struggles to regain 0.7000.