Quick FX Snapshot

The US dollar is trading broadly mixed against the major foreign currencies. It is consolidating yesterday’s intervention-inspired losses against the Japanese yen. There was no clear sign of intervention today and the greenback has been confined to around a quarter yen range on either side of JPY85.50. The euro is extending its recent gains, with the help of good buying on the crosses, has overcome the offers near $1.3050. Although intra-day technical indicators are over-extended, we suspect a more pronounced shift of buying euro weakness rather than selling into strength ahead of next week’s FOMC meeting.

Sterling is underperforming following the disappointing retail sales (-0.5% vs consensus +0.3%). The better offered dollar may conceal the extent of sterling’s weakness, but watch its performance against the euro. A convincing break of GBP0.8400 may be significant.