FX Closing Comments

There was substantial volatility in many pairs today as the euro-zone and U.S. competed over rate expectations. A very bullish German IFO had traders pondering a more aggressive ECB, which perked-up the Euro until markets settled into a pre-Fed lull. When the Fed raised and then issued a rather hawkish statement, the Dollar quickly made a strong rally against all of the majors. Of secondary importance was a very firm U.S. consumer confidence report (107.2). On the other hand, a key ECB statistic, M3 money supply, was also reported higher than expected, adding support for the view that the ECB is getting ready to raise. It is interesting to note that today's Dollar rally did, however, stop near the 100-day MA in nearly all key pairs (especially relative to the Pound and Yen), which implies continued indecision.