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Dollar Stymied as Fed Quells Taper Talk

FOREX
  • The greenback initially firmed on the FOMC statement, in which the board seemed to acknowledge the gathering pace of the US economic recovery. This price action revered throughout the presser, however, as Fed Chair Powell remained adamant that it was too soon to consider any tapering of asset purchases until 'substantial' further progress was made.
  • EUR/USD was a notable beneficiary for the weakness in the greenback, with the pair extending gains through the week's high to touch the best levels since late February. Feb 25th's 1.2243 now looks achievable should short-term momentum persist.
  • Oil-tied currencies traded particularly well Wednesday, with CAD and NOK among the session's best performers as both hit multi-year highs against the greenback. A firming crude futures curve was largely responsible, with the week's DoE data showing a far larger than expected draw in distillates reserves.
  • Focus Thursday turns to weekly jobless claims data, advance Q1 US GDP and regional German CPIs. Speeches from Fed's Quarles, ECB's de Guindos, Elderson, Holzmann and Weidmann are due.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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