Summary:

• The US dollar has added to yesterday’s gains so far today 
• Stronger than expected initial jobless claims and Empire state manufacturing are supporting USD
• Gold has broken below a potentially key support level

 The US dollar is rising amongst the vast majority of its pairs with only the BRL higher on the day

The US dollar staged a quite remarkable comeback yesterday after first falling lower on the weaker than expected CPI and retail sales figures. The Fed was always going to be the key determinant for the US dollar’s fate on Wednesday and whilst it may be a stretch to claim the bank were unequivocally hawkish they were certainly less dovish than many had expected.

 The EURUSD respected prior resistance from the high 1.12s and in breaking down below 1.1185 the market has now made a break lower. 1.1100 the next level to watch onthe downside

 Whilst the market had already penetrated support prior to this afternoon’s economic releases they have helped the cause of short with initial jobless claims falling to 237k and showing continued strength in the US labour market. We also saw a impressive pickup in the Empire state manufacturing index which rose to 19.8 – well above the 5.2 expected and the -1.0 last time out.

 The resurgence in the greenback has weighed on Gold with the precious metal falling below key support at 1260. A close below this level tonight would further confirm the break lower with 1245 a level to now keep an eye on.