May 2: market overview

US dollar continues the rebound after the yesterday’s FOMC meeting. The Fed left the rate at a record low range of 0-0.25% to support the economic recovery. FOMC also decided to maintain bond purchases at $85 billion per month and signaled it is prepared to either "increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes".

EUR/USD failed to hold recent gains and slipped back to $1.3150 after having touched $1.3240 yesterday. Key risk event of the day is the ECB monetary policy decision (11:45 GMT). More than a half of economists surveyed by Bloomberg now expect the ECB to cut rates to a record low of 0.50%.

GBP/USD is consolidating at $1.5550 before a report to show UK construction shrank at a slower pace in April. Yesterday cable tested a fresh 10-week high at $1.5600. USD/CAD is trading below 1.0100.

AUD/USD dropped to $1.0225. Chinese HSBC final manufacturing PMI came a bit below the forecast, but holds above 50.NZD/USD slipped below 0.8500. USD/JPY keeps declining for a 6th consecutive day and is trading at 97.20.

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