Today marks the start of the two-day FOMC meeting that many in the market are looking at to spark a new phase in the Dollar bull-run. Rumours and speculation of a hawkish undertone to the Fed statement remain rife but IMM names have been noted buying EUR/USD, in what some are calling a pegging back of pre-FOMC Long USD positions.
The Euro has been weighed on in European trading by the 150 level in EUR/JPY while EUR/USD was underpinned by the surge in Euro Zone Industrial Production in August. The lower Euro levels have helped the index leap by 3.7% on the month and 14.3% on an annualized basis, compared to the +0.8% & +10.1% that was generally expected. Offers into 1.2550 capped as German & Eastern European accounts sold while European interbank players have been noted on both sides keeping the price choppy inside 1.2525/50.
Looking ahead, less significant US data is set for release early-on into North America while comments dominate the latter half of the day.
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