Euro Pared Gains Against Dollar Ahead of FOMC Minutes.

While Sterling stays firm against dollar ahead of FOMC minutes, other European majors, Euro and Swiss Franc, pared some of this week's gain. The greenback also strengthened against other commodity currencies. In particular, USD/CAD took out 1.0444 resistance today and suggests further upside in near term. Data released today saw UK CPI trends total orders improved much more than expected to 0 in August, comparing to expectation of -8. Public sector net borrowing cane in smaller than expected at GBP -1.6b in July.

 

Markets are expecting Fed to taper the $85b per month quantitative easing program in September but that would likely be by a small step of $10b reduction. Such expectation has pushed treasury yields to highest level in nearly two years. Meanwhile, DOW dropped more than 4% since early August. Today's FOMC minutes might reveal that policy members are more upbeat on the economic outlook and acknowledge the improvements in the labor markets.