Forex Today: USD extends Fed-led sell-off, Aussie rallies hard, Eyes on US durable goods

Forex today was driven by renewed US dollar selling across the board, as the Asian traders reacted negatively to the dovish FOMC outcome and heavily sold-off the buck. The Aussie benefited the most from broad based USD weakness, while the Kiwi followed suit. The Euro and GBP recorded fresh multi-month tops against its American rival.

Calendar-wise, we had a light Asian session today, however, stronger-than expected China’s industrial profits data offered fresh boost to the Antipodeans and commodities’ prices.

Main topics in Asia

Fonterra raises its farmgate milk price forecast

Fonterra, New Zealand’s dairy giant, made an announcement earlier on the day, stating that it has raised its farmgate milk price forecast to NZ$6.75/kgms, Reuters reports.

South Korean Official: No signs of North Korea missile test - Yonhap

South Korea’s news agency, Yonhap, reported comments from a South Korea official noting that there are no signs of North Korea missile test.

Australia Import Price Index (QoQ) came in at -0.1% below forecasts (0.7%) in 2Q

Goldman raises 3-month and year-end iron ore price forecasts

Goldman Sachs has raised the 3-month iron ore price forecast to $70 a metric ton from the previous forecast of $55. The year-end target has been revised higher to $60 from $55. 

Key Focus ahead

With the all-important Fed outcome out of the way, attention turns towards the critical US durable goods and advance GDP figures for the next direction in the US dollar. In the meantime, markets await the release of the German GFK consumer climate data due ahead of Europe open, while the Eurozone money supply and UK CBI realized sales data will fill in an otherwise quiet EUR calendar. The US docket offers the durable goods, goods trade balance and jobless claims releases today.

EUR/USD: A test of 1.1800 likely on less hawkish Fed, eyes on US d urable goods

The EUR/USD pair extended its post-FOMC overnight rally and went on to hit fresh two and a half years high at 1.1747 in the Asian trades this Thursday, as a less hawkish Fed statement continued to weigh on the sentiment around the US dollar.

GBP/USD - Investors are skeptical about the rally, bond yield spread nears key support

The broad based USD selling following the FOMC rate decision pushed the GBP/USD pair above 1.31 handle. The pair remained well bid in Asia and rose to 1.3149; its highest level since September 2016. 

FOMC may delay drawdown’s start if debt ceiling upsets markets - BBG

Bloomberg carries an articles on Thursday, noting that, despite Fed’s indication that it would start-off balance sheet normalization process from September, a looming deadline for raising the government’s debt ceiling could end up disrupting the Fed’s plans.