Markets shy from risk ahead of critical Fed...>

FOREX: Markets shy from risk ahead of critical Fed decision

-The recent greenback rally slowed Tuesday, with the USD sitting in the middle

of the G10 FX table as markets opted for a far more risk averse stance ahead of

the Fed decision Wednesday. Both the JPY and the CHF gained while equities in

the US and Europe slid, although US bond markets seemed relatively tranquil.

-JPY strength helped pressure USD/JPY back to the lower levels of the week, but

the Monday low and the 50-dma at Y108.42/108.36 were untroubled throughout.

Similarly, the pullback in EUR/CHF failed to challenge the key 1.10 mark.

-Scandinavian currencies slid sharply, with SEK and NOK among the poorest

performers in G10. This followed a particularly poor turnout from Swedish prelim

GDP, which fell into contraction for Q2, helping boost EUR/SEK north of both the

100- and 50-dmas.

-It goes without saying the FOMC rate decision will be the focus of the

Wednesday session. The decision crosses at 1900BST/1400ET, with Powell's presser

30 minutes later. German retail sales, French & Eurozone CPI, Canadian GDP and

MNI Chicago PMI are also due.