Yen turns weaker after Fed meeting

USD/JPY rebounds from three-week low

The initial reaction to the Fed meeting was for the yen to strengthen since the Fed seemed to pour cold water on the notion that the next Fed move could be a rate cut. However, that move didn’t last long and a stronger US dollar contributed to the turnaround aided by reasoning that the Fed was not going to hike rates anytime soon either.

USD/JPY climbed above the 200-day moving average again and appears to be respecting support at the 55-day moving average of 111.28. The moving average has remained intact on a closing basis since March 25.

USD/JPY Daily Chart

Source: OANDA fxTrade

Equities rebound after yesterday’s drop

Positive sentiment returned to equity markets this morning, though China and Japan holidays may have contributed to a lack of liquidity. US indices were up 0.2% to 0.3%. Asian bourses responded to PMI readings from across the region which held above the 50 contraction/expansion threshold. The exceptions being Malaysia and Taiwan, the latter stuck in contraction territory for a seventh straight month.

US30USD Daily Chart

Source: OANDA fxTrade

Will Asia cry over its PMIs?

German retail sales in focus

Germany’s retail sales data for March are expected to show a deterioration of 0.4% following a 0.9% increase the previous month. The Bank of England holds its rate meeting today and is widely expected to maintain its current rate and asset purchase stance unchanged as the Brexit cloud hangs over the economy.

The North American session sees US Q4 nonfarm productivity and unit labour costs released but March factory orders numbers will attract more attention. They’re expected to rebound from February with a +1.5% reading from -0.5%. The dip in the ISM manufacturing PMI for that month (from 55.3 to 52.8, the lowest since October 2016) could filter through into these numbers and s create a disappointment.

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