Markets adopt a defensive pre-Fed stance -....>

FOREX: Markets adopt a defensive pre-Fed stance

- Haven currencies were in demand throughout the Tuesday session, helping buoy

JPY and CHF to the top of the G10 table. Early greenback resilience faded into

the second half of the day, which helped USD/CHF break below the 0.95 mark for

the first time since mid-March.

- USD sales came alongside a pretty sanguine US equity open, which saw US

indices follow their European equivalents into negative territory. Greenback

selling helped flatter the major pairs and keeps EUR/USD well within striking

distance of the recovery high at $1.1384 and bull trigger.

- The defensive tone worked against commodity- and growth-proxies, which kept a

lid on AUD, NZD and CAD throughout. Mild profit-taking in AUD/USD seemed to fade

ahead of the close, however, with the pair again just below $0.70.

- Focus Wednesday rests solely on the shoulders of the FOMC, with markets

watching carefully for any mention of yield curve control or forward guidance.

Outside of the Fed decision, Westpac Consumer Confidence numbers for Australia

and inflation data from China and the US are due.