The U.S. Dollar Index has fallen back to 103.50, the midpoint of its pre-FOMC range after testing 103.82 yesterday. Support at 103.25 and resistance at 103.75 will continue to define the limits for the dollar (barring unforeseen headlines) until after tomorrow’s FOMC rate announcement. The dollar’s performance vs. its G-10 counterparts overnight is an almost even split between ~0.25% gains and losses. The dollar’s best performance is a 0.33% gain vs. AUD after the AUD/USD traded too near resistance at the 20-day moving average (0.6633).
U.S. Treasury yields moved lower overnight with the widest gains concentrated in the longer-term tenors: 20, 25, 30-year tenors +0.032%. The benchmark 10-year tenor is +0.023%.
Today is the first of the FOMC’s 2-day policy meeting. The volatility accompanied by tomorrow’s rate announcement coincides with month-end deal flows, potentially compounding reactions in the FX markets. If possible, covering month-end exposures prior to the Fed’s 2pm ET announcement may be warranted.
U.S. equities moved higher yesterday, the Nasdaq gaining 1.12% and approaching recent record highs at 17665.26. The S&P 500 gained 0.76% and the DOW was +0.59%. Equity futures are signaling a lower open today, likely profit-taking after yesterday’s gain.
Oil is steady at $76.66/barrel, -0.14%. Gold has moved higher, +0.76% today to trade at $2,047.21/oz. and is +1.72% over 4 days.
