Weekly FX Focus

The greenback managed to push out a modest advance for the past week. All eyes will now turn to the US Fed’s FOMC meeting on 28-29 October, which will be an important catalyst for market sentiment and in turn the US dollar. The statement will be released at 2am Singapore time on 30 October. The Fed will see its QE3 program coming to an end, from monthly purchases of US$85bn 2 years ago. Obviously, markets will pay particularly close attention to the FOMC’s take on the “rate normalization” schedule and the language, especially in view of the unusually volatile moves in equity, FX, bonds, and commodities markets since the last FOMC meeting on 16-17 September. No Fed speakers are scheduled in the run up to the FOMC this week, though US Fed Chair Yellen is scheduled for a speaking event late Thursday in Washington, after the FOMC, on “Diversity in Economics”.