The Euro is trading at 1.0854 at this writing.  The low has traded at 1.0831 while the high has traded at 1.0914.  The Euro is holding a softer stance after the Fed rate increase that was announced following the FOMC meetings yesterday.  The Federal Reserve has raised the Federal Funds Rate by quarter of a point from off of its lows to a level of 0.50% now.  This rate hike was widely expected across all financial markets and closes a long spell of rates at their lowest levels.  This hike ushers in a new phase of expected growth in the US economy.  The Fed has made it abundantly clear that although this rate hike is the start of an improving phase in Fed monetary policy, they will be using such increases to support an improving economy rather than aggressively seeking continued rate hikes at this juncture.  The Fed is being cautious and vigilant in their forward guidance as they do not wish any rate hikes to slow economic growth or do worse in causing a revisit to a recessionary climate.  Today there was the release of German Ifo Business Climate which was lower than expected with 108.7 recorded.  The Italian Trade Balance beat expectations recording a surplus of 4.81 billion Euros.  The Euro remains poised towards the downside as markets continue to digest the impact of the Fed rate hike.  In turn, the US Dollar looks to be well supported across the currency markets.

The British Pound is trading at 1.4934 at the moment.  Sterling has traded at a low of 1.4949 while the high has traded at 1.5010.  Cable has eased further today as investors have supported the US Dollar in the wake of yesterday’s Federal Reserve rate hike.  However, the slide of the Pound was halted following better than expected UK Retail Sales which more than doubled expectations registering 1.7%.  This has helped Cable to recover slightly off of the low.  However, the Pound remains poised towards the downside with investors continuing to digest the impact of the Fed rate hike.  This rate hike will make the US Dollar more attractive to higher yield-seeking investors who will see this liftoff as a starting point for further increases as the US economy continues to improve.  UK CBI Industrial Order Expectations is better than expected despite posting -7.  This data point is the last significant piece of UK economic data scheduled to be released this week.  Investor attention now switches towards weekly US employment data.

The Japanese Yen is trading at 122.43 at present.  USD/JPY has traded at a low of 122.20 while the high has been 122.64.  The Japanese Trade Balance is better than expected reporting an entirely balanced budget while expectations anticipated a deficit of 0.21 trillion Yen.  However, this data has had little effect on slowing support for the US Dollar versus the Yen in the aftermath of the Fed rate hike.  Tomorrow will see the Bank of Japan make its last Monetary Policy Statement for the year.  This will be followed by the BOJ Press Conference which will clarify the state of the Japanese economy and the direction of their current policy initiatives.
AUD/USD is trading at 0.7203 with the low being 0.7163 and the high being 0.7248.
USD/CAD is trading at 1.3818 with the low trading at 1.3770 and the high trading at 1.3833.
This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.