Dollar Snowed in Low Volume Range as FOMC Begins Two-Day MeetingBy
Sterling falls as May gets nod to trigger Brexit late March
Chinese retail misses estimates while industrial output beats
Dollar traded in a tight range against most major peers with turnover below average as traders held on to existing positions ahead of the Federal Open Markets Committee two-day policy meeting starting today.
Volume was damped by a looming winter snowstorm in New York which spurred market participants to leave work early Monday. The pound weakened slightly after the U.K. parliament gave Prime Minister Theresa May permission to start Brexit talks, paving the way for her to trigger the move in the last week of March. Australia’s dollar fell after February business confidence declined though losses were stemmed by a mixed set of Chinese economic data.
China’s cumulative retail sales for February missed estimates to fall below 10 percent for the first time since 2003 while fixed-asset investment and industrial output improved.
“While China retail sales disappointed the market consensus, the overall picture including industrial production and fixed asset investment, illustrates solid underlying momentum in early 2017,” said Peter Dragicevich, an FX strategist at Nomura Singapore Ltd. “These positive elements should help stabilize the Aussie dollar following the modest dip earlier today."
- AUD/USD drops 0.2% to 0.7557, weakest G-10 pair
- Poor business sentiment weigh spot down to 0.7550 where option related bids are filled, traders say
- February NAB business confidence falls to 7 from 10 in January; business conditions index is also down to 9 from 16 the previous month
- GBP/USD trades defensively off cross-related flows against the euro after the U.K. parliament announces decision to give PM May the go-ahead on Brexit and Scotland’s Sturgeon lays ground for a new independence referendum by spring 2019
- Option-related bids under 1.2200 strikes expiring all week are filled, traders say
- Macro offers between 1.2220/50 remain layered ahead of London open
- USD/JPY is sold down from session highs to clear a large sell order that was executed at the Tokyo fix which was set near 114.85 level, slightly down from New York close, a trader says