Dollar Bid Arrives

The follow-through from the strong FOMC Minutes finally arrived Tuesday and EUR/USD closed at the lowest since mid-March. The pound was the top performer while the euro lagged. Australian construction and Chinese sentiment numbers are due later. The Premium Video for English speakers will be posted and sent to subscribers after this IMT, covering the existing 8 trades.

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We've lamented the absence of a sustained US dollar bid after the FOMC Minutes surprise but it may have finally arrived. The FX market isn't always quick to change gears but real money USD buying appeared to ramp up.

EUR/USD fell below the 100-day moving average and the late-March lows after three trading days of consolidation. AUD/USD also fell to the lowest since early March with the help of dovish comments from Stevens. The third mover was gold, which dropped $20.

The dollar was given an added lift by a 16.6% monthly jump in new home sales compared to 2.3% expected. The enthusiasm was slightly tempered by the Richmond Fed at -1 compared to +8 expected. The Empire and Markit manufacturing numbers have also pointed to softness.

WTI crude oil caught a late bid to above $49 per barrel after API inventory data showed a 5.1 million barrel draw last week. That leaves the Canadian dollar in a tricky spot ahead of Tuesday's BOC decision. The statement is likely to cool growth expectations.

In the near-term the calendar features Australian skilled vacancies at 0100 GMT followed by Q1 construction work 30 minutes later. The latter is expected to fall 1.5%. Comments from Stevens yesterday were benign but they coincided with AUD selling.