USD
The dollar traded mixed in the run up to the big FOMC tomorrow. Whilst many market participants are remaining cautious unwilling to take large bets before such a big event that hasn’t stopped large price moves today with the GBP/USD moving over a hundred points in the morning and AUD/USD likewise rallying over 100 points in only 15 minutes. Nevertheless the consensus seems to be that the dollar is oversold so short positions are thinning out. The FOMC is overshadowing another large event, this time in Politics, with the mid-term elections today. It is expected Congress will go over to the Republicans who are currently in a minority whilst the senate will remain Democrat. Historically such a split has been the best for equities and seen the most decreases in bond yields. Nevertheless with bond yields already at historic lows, deflation might not be the most desirable outcome from the current starting point. On the data front the ABC Consumer Confidence is the only release today with expectations unchanged. At midday GMT the dollar traded at $1.3983 to the dollar and $1.5982 to the pound.
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