USD Higher Following Downbeat Beige Book
The greenback initially bounced lower following release of a rather pessimistic Fed Beige book, before quickly reversing to touch intraday highs vs. most major currencies.
The report provided a less-than-subtle reminder of mounting downside growth risks — likely to have caused the lower knee-jerk reaction — but the Beige Book was also chock-full of inflation warnings, which when combined with Plosser’s comments y/day helped push USD higher after its initial bounce lower.
EUR/USD broke out of its tight range around 1.57 after the report and is now trading just off its lowest level of the day at 1.5681. Cable, up 0.33% to 1.9983, issued little response to the Beige Book and is currently trading at its 9-day moving average. USD/JPY reached session highs after the release but was unable to breach the 108 level after peaking out at 107.96.