Australia: The Australian Dollar continued to be sold off late yesterday and into the evening trading session ahead of the widely anticipated FOMC Meeting overnight.

As far as economic outlook is concerned in the Sates, the FOMC stated "the pace of recovery in output and employment has slowed in recent months" which contrasts with it's June statement that the economy "was improving gradually".

Our AUD traded lower to 0.9060 as base metals and equity markets were sold.

We saw the release of Australian NAB business confidence report, which showed a fall of 2 points to +2 in July, while business conditions fell 3 points to +5.

The Chinese trade surplus reported a rise to $28.7bn in July slightly better than expected, while the import growth declined for July to 22.7% from 34.1% in June.

Today will see some more data releases out of China, which will have markets attention and we expect the AUD to range trade ahead of those releases with a bias to the upside.

Majors: Investors sought to take risk off the table by squaring positions ahead of the FOMC announcement.

The USD rallied against the major currencies and as stated above, the FOMC continued it's the tone that rates would remain on hold for "an extended period" as inflation is expected to remain low for some time.

They also said that they will continue the quantitative easing by re-investing the principle payments of its agency and mortgage back securities debt into longer-term treasuries as the debt matures.

They made a point of saying that this is not to be taken as additional quantitative easing, as the balance sheet will remain the same.

They also voiced their concern over the weakness of recent economic data and the disappointment voiced when they released the most recent Beige Book, but of interest was their dropping of comments on European Sovereign and Bank concerns.

Continued high unemployment, tight credit conditions and little income growth will continue to put pressure on households.

Tonight in the US will see the release of the US Trade Balance for June while in the UK the BOE will release its Quarterly inflation report.

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