The dollar remained firmer as market participants were speculating that the Fed would remove the considerable time commitment. Asian markets were in a positive mood despite Russia’s financial crisis and falling oil prices. The positive market sentiment saw the yen lose its shine. However, risk appetite saw a retreat in Europe, as investors worried about Russia’s crisis and its spill over impact, and as such major equities indices were in the red.All eyes are on the FOMC meeting. The Fed statement will likely signal that the U.S. central bank is not in a hurry to hike the interest rate and Chairwomen Yellen will attempt to clarify that the Fed will adopt a cautious approach to raising the interest rate. So the meeting result will initially trigger dollar selling. EUR/USD was under pressure in Asia trading, due mainly to the dollar’s broader strength, coming off yesterday’s high of 1.2569. The pair extended its decline, falling as low as 1.2445. Euro-zone final CPI confirmed the preliminary reading of 0.3%, a 5-year low. EUR/USD could see a reversal of its recent declines especially as the dollar is seen declining after the FOMC meeting. In the meanwhile, downside will be limited by 1.2410.USD/JPY has reversed some of yesterday’s losses with Japan’s weak exports figure weighed on the yen. The pair extended its gains and hit 117.50 at the begging of the European session but later saw a slight retreat to 117.10. A shift in market sentiment together with the dollar-related developments will remain a major driving force for the pair in the coming days. A dollar positive development could push USD/JPY towards 119.BOE minutes showed that there was no change in MPC voting. A separate data showed that the UK’s weekly earnings figure exceeded expectations. But this data is unlikely to alter the BOE’s monetary policy; as such cable was virtually unmoved by it. The pair struggled to go above 1.5742; 1.5650 may provide important support on the downside.EUR/CHF stayed below 1.2010 while USD/CHF held a bid tone, staying near 0.9640. A slight improvement in Swiss ZEW survey didn’t help the CHF.AUD/USD fell to a fresh 4-1/2-yr low of 0.8145 in Asia trading and is likely to decline further if the FOMC statement sounds hawkish. Elsewhere, NZD/USD came under pressure having hit 0.7848 yesterday after the latest global dairy auction saw prices rise 2.4 percent. Thursday’s New Zealand GDP data will show that the economy slowed in Q3, which should in turn exert selling pressure on the Kiwi.
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