All eyes are on Japan and FOMC rate decision tonight.

It was a relatively quiet US session with no economic data and no Fed speakers.

Attention was still on the situation in Japan.

Euro traded higher as ECB governing council member Bini-Smaghi continued to signal an imminent hike in interest rates.

Bank of Japan made no changes to the policy rate and the maximum size of the asset purchase facility was double to JPY 10 trn. S&P said the earthquake has no immediate impact on Japan’s sovereign rating and Moody’s said it is unlikely that the earthquake would affect Japan’s rating. However Moody’s said the quake may have hastened the point at which investors lose confidence in the public finances.

Sterling was boosted when Fitch affirmed the UK’s AAA rating, noting that the risks to the rating are reduced by a strong and credible fiscal consolidation program.

Things are still not looking that good in Japan with this whole fear of a nuclear meltdown. It’s quite scary and I do hope this nuclear situation gets resolved. We do have quite a lot of data tonight, and looks like markets are still quite volatile and risk averse.

Quite a difficult market at the moment, what do you think?

Data Today

Eurozone Employment – 10am GMT

German ZEW Survey – 10am GMT

Eurozone ZEW survey – 10am GMT

US Empire Manufacturing – 12.30pm GMT

US Import price index

US Net Long term TIC flows – 1pm GMT

US FOMC Rate Decision at 18.15 GMT

Happy Trading!

FxTaurian