FX Awaits US Data, FOMC

At 8:30 AM US Weekly Jobless Claims (exp 318k, prev 324k)
US Q1 GDP (exp 0.8%, prev 0.6%)
US Q1 core PCE (exp 2.2%, prev 2.2%)
At 2:15 PM FOMC Monetary Policy Decision (Exp 5.25%, Prev 5.25%)

Garnering the lion’s share of market attention today will be the FOMC monetary policy decision, due out in the afternoon at 2:15 PM. While the Fed is widely expected to leave rates unchanged at 5.25%, traders are eager to decipher the accompanying statement – particularly for any acknowledgement of the continued deterioration in the housing market stemming from the sub-prime debacle. Further, the overall outlook for inflation will be closely scrutinized as markets continue to assess the likelihood for a possible shift to an easing stance over the remainder of the year. We’re not anticipating any significant alterations from the previous statement, except for a minor comment on the sub-prime market and more specifically, reassuring markets’ fears of any spillover and discounting the situation as more of an isolated incident.

US economic data due out in the coming session will see the final reading for Q1 GDP, expected to edge up to 0.8% from 0.6% and the Q1 core PCE price index, seen unchanged. Weekly jobless claims are expected to slip to 318k, compared with the prior week at 324k.