The dollar extended its post Fed slide in European trading, with the dollar index breaking below 98.50 for the first time since October as Fed Chair Powell’s cautious tone and clear divisions within the FOMC continued to weigh on sentiment, lifting the euro.
The Aussie dollar initially benefited from dollar weakness but reversed overnight after Australia’s November jobs report disappointed, showing a sharp drop in full-time employment and a lower participation rate despite the unemployment rate holding at 4.3 percent.
Elsewhere, the Swiss National Bank held rates at zero and trimmed its medium-term inflation forecasts, noting slightly improved global conditions but stressing that lower CPI projections do not indicate a return to negative rates. The bank also reiterated that FX operations are not designed to support exporters.
Looking ahead, today’s data calendar includes US weekly jobless claims, trade figures, and wholesale trade data for both the US and Canada.
Exclusive FX research from LMAX Group Market Strategist, Joel Kruger
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