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Economic calendar (GMT0):
01:30 Australia RBA Bulletin Quarter II
04:30 Japan All Industry Activity Index, m/m April +1.5% -3.7% -4,3%
04:30 Switzerland SNB Financial Stability Report 2014
07:30 Switzerland SNB Interest Rate Decision 0.25% 0.25% 0.25%
07:30 Switzerland SNB Monetary Policy Assessment
07:30 Switzerland SNB Press Conference
08:30 United Kingdom Retail Sales (MoM) May +1.3% -0.5% -0.5%
08:30 United Kingdom Retail Sales (YoY) May +6.9% +4.2% +3.9%
09:00 Eurozone Eurogroup Meetings
The U.S. dollar dropped against the most major currencies after the Fed’s interest decision on Wednesday. The Fed cut its monthly asset purchases by another $10 billion to $35 billion and kept the Federal Funds Target Rate between zero and 0.25 percent. Market participants had expected this decision. The Fed pointed out that interest rates will remain unchanged for a considerable time after the Fed’s asset purchase program ends.
Investors had awaited Fed Chair Janet Yellen gave some hints when the Fed will start to rise its interest rate, but it didn’t happen. Investors were disappointed. The U.S. currency suffered due to this disappointment by investors.
The Fed lowered its forecast for economic growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously.
The Fed expect its interest rate to reach 1.2% by the end of 2015 and 2.5% by the end of 2016.
The New Zealand dollar traded lower against the U.S dollar due to the slower than expected economic growth in New Zealand. New Zealand’s gross domestic product increased 1.0% in the first quarter, missing expectations for a 1.2% gain, after a 1.0% rise in the fourth quarter of 2013. The fourth quarter of 2013 figure was revised up from a 0.9% increase.
On a yearly basis, gross domestic product in New Zealand rose 3.8% in the first quarter, exceeding expectations for a 3.7% increase, after a 3.1% gain in the fourth quarter of 2013.
The Australian dollar climbed against the U.S. dollar after the Fed’s interest decision. Japanese life insurance firms and retail funds also supported the demand for the Australian dollar due to higher yields.
The Reserve Bank of Australia (RBA) released its June bulletin. The RBA said foreign property demand may have pushed up houses and the supply of dwellings in Australia. The RBA also said the growth in infrastructure investment in China could remain strong for some time, which will have a positive impact on Australian commodity exporters.
The RBA pointed out that the lower retail sales from May to mid June was driven by “the “significant downturn in consumer confidence”.
The Japanese yen climbed against the U.S. dollar after the Fed’s interest decision. Japan’s all industry activity index declined 4.3% in April, after a 1.5% increase in March. Analysts had expected the index to fall 3.7%.
EUR/USD: the currency pair traded mixed
GBP/USD: the currency pair traded mixed
USD/JPY: the currency pair traded mixed
The most important news that are expected (GMT0):
10:00 United Kingdom CBI industrial order books balance June 0 3
12:30 U.S. Initial Jobless Claims June 317 316
14:00 U.S. Leading Indicators May +0.4% +0.6%
14:00 U.S. Philadelphia Fed Manufacturing Survey June 15.4 14.3
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