A revival of the US dollar that occurred on Wednesday after the FOMC meeting and was continued throughout Thursday has been stopped short today as the data simply did not allow the move to be continued. The US dollar has been the weakest G10 currency as the US session is into the final phase. Moreover, Wall Street started hesitating as well – could a seasonal June’s correction be underway?

Let us recall that the US dollar was buoyant after the FOMC meeting as the US central bank ignored a streak of weaker domestic data and president Yellen pointed at one-off factors responsible for lower core inflation. It looked as if the Fed was still on track for ambitious tightening. However, we got some more concerning data from the US today. Housing starts tumbled by 5.5% m/m and building permits were not far better at -4.9% as both categories soured into a negative territory on annual basis and missed the consensus badly. Moreover a measure of consumer confidence disappointed as well as both the expectation index and a mark on present conditions declined vs May. Furthermore FOMC’s Kashkari outlined why he dissented on Wednesday and voted for rates to remain unchanged. Even if that was a lone voice at the Fed, his reasoning reflects many concerns that are present on the market these days and could suggest that unless we see a turnaround in data – which has clearly not been the case today, more FOMC members could become less confident. As the US dollar is the weakest, it’s just marginally down against the yen after a dovish message from the BoJ today. Antipodean currencies are the winners with both AUD and NZD gaining 0.6% against the greenback.

Euro is in the middle of the pack today, gaining around 0.4% against the USD as the news on aid disbursement to Greece could reassure investors a bit. 

European equities covered yesterday’s losses with the French CAC40 (FRA40) outpacing UK’s FTSE (UK100) but Wall Street is not in such a good mood at all. While the DJIA futures have been at record highs this morning a technological Nasdaq has been lagging and the Hindenburg Omen recorded on Thursday could spell troubles for the bulls. 

Wheat paced gains on agricultural commodities as our 2017 trade idea market rose on deteriorating conditions. 

Next week could be about central banks as well – we have the RBNZ meeting and the one in Norway plus some relevant data from Canada and we will end the week with European PMIs.